Core viewpoints

23Q3 has revenue of 1.261 billion yuan, year-on-year + 20.7%, month-on-month + 22.0%; net profit of 74 million yuan, year-on-year + 12.9%, month-on-month + 34.0%; gross profit 13.51%, year-on-year + 2.87pct. The company's revenue and profits increased significantly, and the management expenses increased at one time due to consulting fees, which did not affect the long-term profitability. In the future, the company will continue to develop its auto parts business, especially the new energy business. Part of the equipment in 23Q4 Chongqing subsidiary has been installed, and 24H1 is expected to be mass produced. The future planning goal is 13 million sets of automobile drive motor stator and rotor assembly capacity.

Event

On October 17, the company released three quarterly reports for 23 years, with revenue of 1.261 billion yuan, year-on-year + 20.7%, month-on-month + 22.0%, and return-to-mother net profit of 74 million yuan, + 12.9% and + 34.0%, respectively.

Brief comment

23Q3's revenue is 1.261 billion yuan, year-on-year + 20.7%, month-on-month + 22.0%; net profit is 74 million yuan, year-on-year + 12.9%, month-on-month + 34.0%

The growth of gross profit margin creates profit space, and the rate of management and financial expenses has increased.

23Q3 company gross profit margin 13.51%, year-on-year + 2.87pct, gross profit margin continued to increase significantly over the same period last year, building up the company's profit space. Sales expense rate 0.61%, year-on-year + 0.07pct; management expense rate 3.11%, year-on-year + 0.86pct, mainly due to the increase of consulting fees, one-time expenditure does not affect the company's long-term profitability; R & D expense rate 2.40%, year-on-year-0.20pct; financial expense rate-0.22%, year-on-year + 1.75pct, mainly due to the reduction of interest income. Q3 company's gross profit margin increased significantly compared with the same period last year, but under the influence of increased consulting fees and reduced interest income, the company's return net profit margin was 5.87%, slightly lower than the same period last year-0.41pct.

Motor stator and rotor assembly project continues to promote the sustainable development of new energy business.

The company takes the new energy vehicle business (drive motor and battery precision structure) as the core development direction, and has obvious growth in the future. In January 2023, the annual production of 3 million sets of new energy vehicle motor stator and rotor assembly project started in Liangjiang New area, part of the equipment of 23Q4 was installed, and 24H1 was mass produced. The future planning goal of the company is 13 million sets of automobile drive motor stator and rotor assembly production capacity.

Profit forecast: the company focuses on the motor parts industry for more than 30 years, and the auto parts business is growing brightly. The company's new energy vehicle motor stator and rotor assembly project continues to advance, 23Q4 equipment begins to be installed, and 23H1 is expected to achieve mass production. Due to the continued prosperity of the downstream new energy vehicle industry, we raised the 2023-2025 net profit to 2.52,3.36 and 391 million yuan respectively, corresponding to the PE of about 27.4,20.5,17.6 times, to maintain the buy rating.

Risk hint: the risk of industry and business performance fluctuation, the risk of raw material price fluctuation, the risk of RMB exchange rate fluctuation.