Events: Abyson released its third-quarter 2023 results report on October 18. In the first three quarters of 2023, the company realized a net profit of 219 million yuan, an increase of 93.09% over the same period last year, and a net profit of 193 million yuan, an increase of 152.93% over the same period last year. Of this total, 2023Q3 realized a net profit of 77 million yuan, an increase of 137.66% over the same period last year, and a net profit of 66 million yuan, an increase of 245.73% over the same period last year.

MiniLED boom continued, Q3 performance returned to high growth. The brief slowdown in the growth of the company's Q2 in a single quarter makes the market worried about the prosperity of the miniLED industry and Abyson's own growth ability, but the rapid growth of Q3 performance once again shows that the temporary slowdown in Q2 growth is only due to unbalanced fluctuations between quarters, and the degree of prosperity of the industry and the company's operating capacity remain the same. On the one hand, miniLED shows that the demand continues to grow, and the industry pattern tends to focus on the head. on the other hand, the company has shown stronger competitiveness than the industry in terms of operation quality, company management, channel laying and so on. with the steady progress of the overseas market and the rapid expansion of the domestic market, the company continues to grow: the company signed a bill of about 3.484 billion yuan in the first three quarters of 2023, an increase of about 42.44% over the same period last year. The rapid growth of the signing amount leads to the rapid growth of the company's performance.

All business indicators are sound and good, and the quality of operation continues to be of high quality. The company has been implementing a sound and efficient business philosophy, adhere to high-quality management. In terms of cash flow, the net cash flow generated by operating activities in the first three quarters of 2023 is about 400 million yuan, which is much higher than the net profit of 219 million yuan in the same period. In terms of operating capacity, the net operating cycle of 22Q2 has been shortened quarter by quarter, with 44 days in the first three quarters, the lowest level since 2016. In terms of profitability, the company's net sales interest rate reached 8.53% in the first three quarters, year-on-year + 2.5pcts, and the expense rate continued to be optimized. The continuous improvement of important business indicators fully shows that the company's management ability is constantly improving, and the construction and iteration of the company's own system is effective.

Investment advice: the "breadth" of the channel end of the global coverage, the "short" level of the autonomous layout of the flat "flat" management system from the management to the executive level, as well as the most active product category management and "standard" product promotion in the industry, this has created the incremental growth flexibility of Abyson, which is different from its competitors in other industries. The company's 2023-2025 net profit is expected to be 321 million yuan, 479 million yuan and 660 million yuan, respectively, and the current market capitalization corresponds to 18.1 PE, maintaining a "buy" rating.

Risk hint: 1.LED display market specification improvement and demand growth is not as expected; 2. The company's market expansion is not as expected; 3. The expansion of energy storage business is not as expected.