3Q22 revenue rose 15.2 per cent year-on-year, and net profit increased 22.8 per cent year-on-year. The company's 1-3Q22 revenue is 354 million yuan (YoY+ 17.3%), the net profit is 142 million yuan (YoY+ 12.5%), and the net profit after deducting non-return is 127 million yuan (YoY+ 21.4%), of which 3Q22 revenue is 176 million yuan (YoY+ 15.2%), net profit is 74.58 million yuan (YoY+ 22.8%), and net profit is 70.67 million yuan (YoY+24.9%). 3Q22's performance has maintained steady growth, mainly due to: 1) the core customer Apple Inc iPhone shipments against the trend growth, market share increase; 2) the company supplies Apple Inc customers with increased quantity and value of material numbers, accelerated introduction of bio-based materials; 3) the company's production capacity continues to increase and order taking capacity is enhanced.
3Q22 gross profit margin remains above 60 per cent and net profit margin exceeds 40 per cent. The company's 1-3Q22 gross profit margin is 61.49% (YoY-0.89pct), of which 3Q22 gross margin is 62.51% (YoY + 0.24pct, QoQ+ 1.45pct); 1-3Q22 net profit rate is 39.99% (YoY- 1.73pct), of which 3Q22 net profit rate is 42.39% (YoY + 2.62pct, QoQ+2.83pct). Under the influence of factors such as the increase in depreciation of fixed assets caused by the new production line, the increase in labor costs caused by team expansion, and the increase in logistics costs caused by the epidemic, the company's gross profit margin and net profit margin remain at a high level. The expense rate during the 3Q22 period of the company was 13.15% (YoY-2.57pct), of which the rates of sales, management, R & D and financial expenses decreased by 0.63,0.83,0.42 and 0.70pct respectively compared with the same period last year.
Apple Inc iPhone shipments against the trend growth, the company's supply share continues to increase. According to Omdia data, 3Q22 shipped 301m smartphones worldwide (YoY-7.6%, QoQ + 2.5%). Among them, Samsung, XIAOMI, OPPO and vivo shipments fell 7.4%, 11.2%, 18.9% and 22.4% respectively compared with the same period last year. Apple Inc, with the launch of the iPhone14 series of new products, shipments increased by 2.6% to 52.2 million units, and market share increased by 1.7pct to 17.3% year-on-year. The number and value of Apple Inc functional materials supplied by the company continue to increase, while meeting Apple Inc's demand for carbon neutralization, active certification and introduction of bio-based materials, along with capacity expansion and order acceptance capacity, the company's performance is expected to grow steadily and at a high speed.
Investment suggestion: we continue to be optimistic that the company will gradually become the first square of functional materials in the world by expanding production capacity, increasing research and development, and opening up new customers / new products / new fields. We expect the company's 22-24 year-on-year return net profit to increase by 26.2%, 32.5%, 24.7% to 2.33, 308, 384 million yuan, corresponding to a PE of 26.2, 19.8, 15.8 times, maintaining a "buy" rating.
Risk tips: consumer electronics demand is lower than expected; market competition is intensified; customer concentration is high.