The company released the third quarter report of 2023, during the reporting period, the company achieved operating income of 234 million yuan, up 7.40% over the same period last year; realized return net profit of 69 million, up 29.11% over the same period last year; and deducted non-return net profit of 59 million yuan, up 33.89% over the same period last year. EPS is 0.40 yuan per share.
The company's performance is growing steadily. During the reporting period, the company realized operating income (234 million, year-on-year + 7.40%) and homed net profit (69 million, year-on-year + 29.11%). Net profit in the first three quarters of 2023, excluding the impact of share payments, was 304 million yuan, an increase of about 22.98 percent over the same period last year.
Profitability and period expense rates have increased. In terms of profitability, the company's overall gross profit margin during the reporting period was 52.62%, an increase of 8.11pct over the same period last year. During the period, the company's expenses were stable, with sales expenses (9.0207 million, year-on-year + 223.88%), mainly due to the increase in quality assurance reserves after share payment and sale; management expenses (48 million, year-on-year + 84.23%), mainly due to the increase in share payments; research and development expenses (45 million, year-on-year + 65.23%) Financial expenses (- 8.658 million, compared with-14.668 million in the same period last year) are mainly due to lower deposit interest rates and reduced interest income. The expense rate during the period was 6.63%, an increase of 4.51pct over the same period last year. The net profit rate on sales was 36.45%, down 1.00pct from the same period last year.
Increase revenue and reduce expenditure strategy to effectively enhance the value of the company. At the end of the reporting period, the company's inventory was 1.88 billion, up 499 million from the beginning of the year; and the contract liability was 537 million, up 157 million from the beginning of the year. The increase in inventory and contract liabilities reflects that the company has plenty of orders on hand and sufficient deliverable products, and the company's turnover will fully grow as downstream customers confirm receipt of the goods. At the same time, in order to cope with the price reduction trend of the industrial chain, the company has firmly and steadily consolidated its own industry position through product design optimization and process improvement.
The company carries out two restricted stock incentives to fully mobilize the enthusiasm of core employees and executives. In October 2022, the company implemented equity incentive, awarded 3.6 million restricted shares, and the first incentive object was middle managers and core backbones, with a total of 101. the number of shares granted for the first time is 3 million shares; in 2023, the company carries out equity incentive again, and the second equity incentive plans to grant a total of 8.5 million restricted shares to the incentive object and 8 million restricted shares for the first time. Of these, the chairman was granted 1.7 million restricted shares, accounting for 0.98 per cent of the total share capital; other senior managers received a total of 1.15 million shares, accounting for 0.66 per cent of the total share capital; and middle managers and core backbones received 5.15 million shares, accounting for 2.96 per cent of the total share capital.
Compared with the previous equity incentive, which takes the progressive system of revenue or net profit as the assessment goal, this time takes the net profit as the assessment goal, excluding the influence of share payment fees, the net profit in 23-27 years needs to achieve 3.45,4.02,4.6,5.15 and 575 million yuan respectively. Combined with the two equity incentive programs, the amortization expense of equity incentive in 22 years of the company is 70 million yuan, accounting for 20.29% of net profit. The amortization expense of equity incentive in 2023-2028 is 0.89,1.33,0.64,0.33,0.13 and 5 million yuan, respectively.
We believe that the two incentive plans cover a wide range of areas and are highly rewarded, and are expected to fully mobilize the enthusiasm of the company's senior managers and core talents, effectively combine the interests of shareholders, the company's interests and the personal interests of managers, and promote the steady and rapid improvement of the company's business performance.
If the active phased array continues to expand downstream, the company may directly benefit from the release of performance brought about by the expansion of the industry.
As the development trend of radar, active phased array is widely used in the fields of radar detection, electronic warfare and satellite communication. we think that the company may stabilize its precision guidance business on the basis of stabilizing its precision guidance business. rely on its technical advantages in satellite communications to open up the satellite Internet market, enjoy the dividends of industry development, and gradually distribute the electronic warfare market.
Profit forecast: the company's return net profit from 2023 to 2025 is 346 million, 419 million and 506 million respectively, corresponding to a valuation of 30, 25 and 20 times, maintaining a "highly recommended" rating.
Risk hint: military purchase orders fluctuate and market competition intensifies.