Event: on October 28, the company released its quarterly report for 2010. the business income in the first three quarters was 1.081 billion yuan, an increase of 64.46% over the same period last year, and the net profit was 307 million yuan, an increase of 131.07% over the same period last year. Among them, the operating income in the third quarter alone was 652 million yuan, an increase of 158.90% over the same period last year, and the net profit was 222 million yuan, an increase of 273.48% over the same period last year.
Order-driven revenue grew rapidly, and net profit in the third quarter increased significantly compared with the same period last year and month-on-month. In terms of revenue, in the first three quarters of 2020, the company achieved revenue of 1.081 billion yuan, an increase of 64.46% over the same period last year, mainly due to the increase in sales orders (verifying the view of recovery of downstream demand put forward by us in the first quarterly report). In terms of net profit, in the first three quarters of 2020, the company achieved a net profit of 307 million yuan, an increase of 131.07% over the same period last year. The growth rate of net profit is significantly higher than that of income, which is due to the continuous improvement of the company's gross profit margin and net profit margin. At the same time, the company's quarterly performance growth continues to accelerate (2020Q1-Q3, net profit growth per quarter is-30.76%, 166.04% and 273.48%, respectively). In addition, as of the third quarter, the company's inventory balance was 2. 5%.
3.8 billion yuan, an increase of 40.88% over the beginning of the year, mainly due to an increase in sales orders and an increase in inventory; prepayments increased by 91.33% over the beginning of the year, mainly due to an increase in prepaid payments; and other receivables increased by 91.09% over the beginning of the year. mainly due to the increase in export tax rebates. The substantial growth of the above financial data indicates that there is strong demand downstream, especially in overseas markets, which is ushering in rapid growth.
Gross profit margin and net profit margin increased significantly, and profitability continued to improve. In terms of gross profit margin, in the first three quarters of 2020, the company's overall gross profit margin was 54.48%, an increase of 5.31% compared with the same period last year. In the three quarters of 2020, the gross profit margin was 52.07%, 54.78%, 55.05%, respectively. (to verify our point of view: the 5G commercial process promotes the increase in the proportion of radio frequency and acoustic testing equipment with high gross margin, and the gross profit margin is expected to continue to increase).
In terms of net interest rate, the company's net interest rate in the first three quarters of 2020 was 29.08%, a substantial increase in 8.52pct over the same period last year. In addition to the increase in gross profit margin, the overall expense rate decreased significantly (sales expense rate / management expense rate / financial expense rate was 6.34% / 5.74% / 0.88% respectively in the first three quarters, respectively, compared with the same period last year)-3.65pct/-0.15pct/+1.89pct Among them, the increase in the rate of financial expenses is caused by exchange rate fluctuations.
Benefit from Apple Inc iPhone year, the company's high growth can be expected. At present, the company's customers are mainly concentrated in the consumer electronics field, and its products are mainly for the top customers in the industry, among which Apple Inc has been the company's largest customer for many years in a row. According to the latest Apple Inc company analysis report released by Morgan Stanley, the proportion of users in China who own iPhone with a phone age of more than 2 years has reached 68%. At the same time, Apple Inc's new iPhone 12 series supports 5G for the first time, and the demand for 5G communication functions will make many Chinese users choose to upgrade and replace iPhone 12. The current sales situation has shown that domestic customers have a strong demand for computers. We believe that Apple Inc's big year has come, and iPhone in the 5G era is a major innovation of the previous generation, and its corresponding module testing and assembly equipment also needs to be replaced. IPhone12 series stock in advance brings testing and assembly equipment demand, which in turn leads to a substantial increase in the company's orders, and high growth is expected in the future.
Maintain a "buy" rating. The advance stock of iPhone12 brings the demand for testing and assembly equipment, which leads to a substantial increase in the company's orders, which is expected to continue to grow high in the future. It is estimated that the return net profit of the company from 2020 to 2022 is 3.86,5.72 and 755 million yuan, and the corresponding PE is 37,25 and 19 times respectively.
Risk hints: 5G process is not as expected, market competition risk, downstream customers are more concentrated risk, export accounts for a larger risk, new product development and promotion is not as expected, integrated circuit business layout is not as expected.