Due to delivery delays, 2023Q1-3 performance was significantly lower than market expectations for the first three quarters: revenue of 129 million yuan (down 42% from the same period last year) and net profit belonging to the parent company of 1.99 million yuan (down 96% from the same period last year). Due to the complex situation in 2023, the delivery of the basic part of the company's business, the nuclear industry, continued to be later than expected, resulting in a significant decline in performance. Our comments are as follows:
Delivery in the nuclear industry has been delayed, with growth at an all-time low. Jingye Intelligence focuses on special robots and special equipment in the nuclear industry, accounting for more than 90% of the revenue from the nuclear industry in 2021-2022. Due to the complex environmental impact this year, the technical verification nodes of major customers in the nuclear industry have been delayed, making it difficult for important projects to be delivered smoothly in 2023, and we expect a substantial downward revision in this year's performance. According to the communication of the company, the project under research is expected to be realized flexibly in 2024, and the output value target of 1 billion yuan will remain unchanged in 2025.
Explosion-proof AGV is developing rapidly, and the standard category is extended. 1) according to the announcement, 2023H1 acquired a 70% stake in Tianjin Jiazi and entered the field of explosion-proof AGV. The revenue of 2023H1 and 3Q23 special robots mainly contributes to explosion-proof AGV. We expect the revenue in the first three quarters to exceed 10 million yuan and the gross profit margin to be higher than 50%. 2) according to the communication of the company, there will be only 1-2 specific scenarios for small-scale applications in 2023, and the long-term market demand for special AGV may exceed the demand for special robots in the nuclear industry.
The technology is stored in advance-the senior management team, during which the expense rate increases significantly. 2023Q1-3's gross profit margin (excluding taxes and surcharges) increased to 49.4% year-on-year, while the rate of sales / management / R & D expenses increased significantly year-on-year (4/13.8/14.1ppt), superimposed prudently to calculate credit impairment losses. The net profit margin (parent) in the first three quarters fell sharply to 1.5% year-on-year, an all-time low. According to company communications, the ideal net profit margin for 2024-2025 is about 20 per cent.
Trend of development
Consolidate the layout of the non-nuclear industry and improve the second growth curve. Since listing, the company has reserved non-nuclear capabilities through endogenous extension. 1) Special: coordinate with Tianjin Jiazi to demonstrate the R & D capabilities of private enterprises in anti-strong radiation, explosion-proof, waterproof and other special technologies; 2) Medical treatment: reserve radionuclide / nuclear drug doctoral team, and actively dock with pharmaceutical companies. We believe that in 2024, in addition to the year of nuclear industry delivery, the progress of the second growth curve is worth looking forward to.
Profit forecast and valuation
Due to the complex situation of the nuclear industry in 2023, the company's delivery forecast has been postponed, and we have substantially reduced our 2023 net profit forecast by 53% to 64 million yuan (- 47%YoY). Considering the phased management & increased investment in R & D, we have lowered our 2024 net profit forecast by 39% to 120 million yuan (+ 91%YoY). The current share price corresponds to 33x in 2024. Taking into account the flexibility of next year's performance, we have lowered the target price by 19% to 47.8 yuan, corresponding to 40x for 2024, and a corresponding increase of 20%, thus maintaining an industry rating that outperforms.
Risk
The risk of large fluctuations in the performance of a single quarter, the delivery rhythm of the nuclear industry is difficult to predict the risk and so on.