Event: the company released its three-quarter report on October 23. In the third quarter, the company achieved 201 million yuan in revenue, 33.16% in YoY+61.51%,QoQ + 33.16%, 27 million yuan in net profit, 60.44% in YoY+, 38.89% in QoQQ, 40.42% in gross profit, 13.56% in 2.63pct, 13.56% in 0.68pct, and 5.72 million yuan in capital reserve in the third quarter due to the impact of equity incentives.
The company's equity incentive expenses were amortized 5.72 million yuan in the third quarter, and the net profit excluding equity incentives reached 32.61 million yuan in the third quarter, an increase of 94.59% year-on-year compared with 3Q21, nearly doubling, and 68.46% month-on-month growth compared with 2Q22. The company gradually got rid of the impact of the epidemic, the three major tracks downstream made concerted efforts, capacity continued to expand, and achieved high growth in the third quarter.
We believe that the high growth in the third quarter is due to the following reasons:
1) gradually get rid of the impact of the epidemic: since April 2022, the company has been affected by the COVID-19 epidemic and stopped production for more than one month, and raw materials, labor costs and transportation costs have all increased, resulting in a greater impact on operations in the second quarter. Since the third quarter, the epidemic situation in Kunshan is relatively stable, the company's production and operation returned to normal, and gradually got rid of the impact of the epidemic.
2) downstream new energy / high reliability / semiconductor three major races: the company's ceramic high voltage DC contactors are the core modules of battery and circuit systems in new energy vehicles and charging facilities; ceramic vacuum capacitors and ceramic high voltage vacuum relays are important electronic components of semiconductor manufacturing equipment, including etching machines, PECVD and other thin film deposition equipment and cleaning equipment. Ceramic high voltage vacuum relay and ceramic vacuum capacitor are the basic core electronic components of aerospace power control system, aerospace and military communication system. The third quarter by the downstream track boom, domestic substitution trend, the company's performance ushered in significant growth.
3) continuous capacity expansion: the company's new digital factory system was put into use in the first half of the year, and we judge that the production capacity has continued to increase since the third quarter, meeting the increasing customer demand and providing a capacity guarantee for the company's performance growth.
It is optimistic about the development potential of the highly reliable market, which will lead to rapid growth in the fourth quarter and the next three years. The company is a domestic military high-voltage vacuum relay supplier that entered the market earlier. At present, ceramic high-voltage vacuum relay and other products have been recognized by customers in aerospace and military fields, occupying a certain market share. Is one of the main suppliers of downstream customers. As the company gets more orders in the highly reliable market, we are optimistic about the growth potential of the highly reliable market in the fourth quarter and the next 3 years.
Investment rating: we are optimistic about the development potential of the company in the highly reliable market, raising the company's revenue forecast for 22max to $767 million for 23 years, compared with $683 million for the previous forecast and $1.666 billion for 2024, taking into account the negative impact of equity incentives on profits and the positive impact of highly reliable markets on profits. With a slight adjustment, the 23-year homing net profit is estimated to be 105 million yuan, compared with the previous forecast of 120 million yuan, increasing the 2024 net profit forecast to 318 million yuan, maintaining the target price of 93.25 yuan and maintaining the "overweight" rating.
Risk tips: intensified trade frictions, less-than-expected technological innovation, less-than-expected expansion of downstream areas, intensified market competition, and intensified epidemic situation.