Event: in the first three quarters of 2023, the company achieved revenue of 4.621 billion yuan, an increase of 38.93% over the same period last year, and a net profit of 1.571 billion yuan, an increase of 25.08% over the same period last year. The non-return net profit was 1.526 billion yuan, an increase of 26.05% over the same period last year.
2023Q1-3 company revenue performance is outstanding, 2023Q3 equipment revenue doubled year-on-year growth.
The gross profit margin of 2023Q1-3 is 47.14%, with a reduction of 2.73pct, a net profit rate of 33.99% and a reduction of 3.73pct. From a business point of view, the operating income of 2023Q1-3 environmental protection projects was 2.262 billion yuan, an increase of 20.25%, accounting for 48.95% of the total income, and equipment manufacturing and service income of 2.339 billion yuan, an increase of 66.49%, accounting for 50.61% of the total income. In the single quarter of 2023Q3, the company achieved revenue of 1.728 billion yuan, an increase of 62.15% over the same period last year, and a net profit of 545 million yuan, an increase of 56.52% over the same period last year and 4.39% month-on-month growth. Of this total, equipment income was 915 million yuan, an increase of 121%, accounting for 52.95% of the total income.
Solid waste has made steady progress, and the amount of 2023Q1-3 garbage in storage has increased by 27%. By the end of the third quarter of 2023, the company had invested and controlled 49 municipal solid waste incineration operation and trial operation projects (including 6 trial operation projects), with an operation scale of about 33700 tons per day, and 13 kitchen waste treatment formal operation and trial operation projects. In the first three quarters of 2023, the company completed 8.7037 million tons of garbage storage (including household, kitchen, sludge and other garbage, including 8.3032 million tons of domestic waste), an increase of 27.39 percent over the same period last year.
New orders for 2023Q1-3 new materials and equipment totaled 2.5 billion yuan, supporting a high increase in equipment revenue. 1) Environmental protection equipment: 2023Q3, the company signed "County small Municipal solid waste Incineration Project (100t/d) incinerator and waste heat boiler system equipment research and development, production cooperation and supporting equipment procurement contract" and "Fuyuan County Municipal solid waste Incineration Power Generation Project General contract", with a total contract value of 97 million yuan, and a cumulative new order of 187 million yuan for 2023Q1-3. 2) New materials and equipment: 2023Q3 signed equipment supply contracts with Jingmen Greenmei New material Co., Ltd. and Weiming Shengqing respectively, totaling 748 million yuan, and the cumulative new orders for 2023Q1-3 new materials and equipment were 2.519 billion yuan.
The production of the high matte project is approaching, and the business layout of new energy and new materials continues to expand. The main factory building of the 40,000-ton Indonesian high matte project of Jiaman Company, a subsidiary of the company, has reached the top and entered the stage of equipment installation in the third quarter to speed up the construction of the project. The Wenzhou lithium battery new material project is progressing smoothly. In July 2023, the company signed a joint venture agreement on the project of smelting Indonesian laterite nickel ore to produce nickel raw materials for new energy (20,000 tons per year) (nickel wet project), and in August 2023, signed the Strategic Cooperation Framework Agreement for the Project with an annual production capacity of 50,000 tons of High Purity Electrolytic Nickel, and the new materials cooperation project blossomed at many points.
Profit forecast and investment rating: solid waste is growing steadily, new material projects are gradually put into production to build a second growth curve, and equipment manufacturing capacity extends to the field of new materials. According to the progress of the company's projects and orders, we maintain the homing net profit forecast of RMB 1,984 million for 2023-2025, corresponding to PE times prior to 15-11-9, and maintain the "buy" rating.
Risk hint: project progress is not as expected, policy risk, industry competition intensifies.