The results were in line with expectations, and the rise in volume and price of protective gloves business led to a substantial increase in profits in the third quarter. In the first three quarters, the company achieved operating income of 4.65 billion yuan (yoy+79%) and net profit of 1.89 billion yuan (yoy+403%). Q3 achieved operating income of 2.37 billion yuan (yoy+160%) and net profit of 1.27 billion yuan (yoy+801%) in a single quarter. The price of Q3 global protective gloves rose further, superimposed the company's new production capacity, and the glove business maintained an upward trend in both volume and price. At present, the company has changed the price adjustment mode of glove products to better adapt to the current high sustainable market environment.
Gross profit margin has risen sharply, and the launch of new capacity is expected to accelerate. Q3 achieved a gross profit margin of 71.86% in a single quarter, an increase of 18.43pct over H1, and an overall gross profit margin of 62.82% in the first three quarters, an increase of 16.84pct over the same period last year. The company's nitrile glove production capacity is faster than expected, and the global epidemic will continue to lead to a global shortage of glove capacity. The rapid release of the company's production capacity will continue to support the company's rapid growth in the next 1-2 years.
The national support collection program has landed, and new products have landed one after another to support the long-term development of high-value consumables business.
Excrossal stent collection won the bid, intended to purchase 100,000 units (accounting for 10% of the total), accounting for about 30% of the company's domestic stent sales last year, that is, about 70% of the company's domestic sales of stents are outside the scope of collection, and this part of the sales may be affected after collection. According to the top price of 2850 yuan, the ex-factory price of products within the collection range (Excrossal) will also be reduced.
The high growth of glove business will support the research and development of new high-value consumables under research or planning, cope with the changes in the profitability of post-harvest support business, and support the long-term development of high-value consumables business.
The results from 2020 to 2022 were 3.99,5.38,5.70 yuan per share respectively, corresponding to PE6.23x/4.62x/4.36x. Protective gloves business has maintained a high demeanor for a long time; high-value consumables business has gradually returned to the normal growth track, and the company's performance in the fourth quarter will further accelerate the release. We maintain the fair value of 47.74 yuan and continue to give a "buy" rating.
Risk hint. Glove market price fluctuations, collection failed to win the bid or significantly reduced prices or the company's performance did not meet expectations; goodwill accounted for a higher proportion of net assets.