Q3 income is-9.40% /-4.64% compared with month-on-month, and net profit of return to mother is-56.86% compared with month-on-month. In 2023, Q1-Q3 achieved revenue of 2.361 billion yuan (yoy+4.76%) and net profit of 140 million yuan (yoy+12.78%), deducting non-net profit from + 2.87 to 113 million yuan compared with the same period last year. The increase in non-recurrent profit and loss is mainly due to the government subsidy received by the company Q3, the refund of the third generation service fee, and the income from the disposal of fixed assets and right-to-use assets. Among them, Q3 realized revenue of 751 million yuan (yoy-9.40%, qoq-4.64%) and net profit of 19.29 million yuan (yoy-56.86%,qoq-70.50%). We estimate that the EPS of the company from 2023 to 2025 will be 1.42,1.86,2.22 yuan respectively. Comparable company 23 years Wind unanimously expected that the average PE is 30 times, give the company 23 years 30 times PE, the target price of 42.6yuan (previous value 42.6yuan), maintain the "overweight" rating.

Q3 profitability is under short-term pressure, or due to the increase in labor compensation / manufacturing costs / IPO fund-raising projects to consolidate profitability, Q3 company gross profit margin compared with the month-on-month ratio + 1.0/-1.9pct to 16.46%, net profit ratio-2.9/-5.7pct to 2.53% The decline in gross profit margin compared with the previous month or due to the increase in labor compensation, the increase in manufacturing costs, the consolidation of IPO investment projects, and the decline in net profit rate compared with the previous month is mainly due to the significant increase in fees during the Q3 period, with Q3 rising from + 5.1/+4.2pct to 14.0%. The year-on-year increase is mainly from R & D fee year-on-year + 2.3pct and management rate year-on-year + 1.5pct, while the month-on-month increase is mainly from financial rate month-on-month + 2.4pct. The company's performance is disturbed in the short term, and the overall trend is upward. 23Q1-Q3 's operating cash flow is from + 21.6% to 2.69 billion yuan, the gross profit margin is from + 1.47pct to 17.81%, and the net profit is + 12.78% from the same period last year.

Communication base station structural components + automobile zero double main industry development, binding major customers + capacity expansion to support business growth companies adhere to the development of communications + automobile double main industries, are bound to the core customers in the subdivision field: communications companies are deeply bound to head communications companies such as Ericsson / Huawei; automotive companies have expanded head new energy customers such as BYD / Rivian/ NIO Inc. / XPeng Inc. / Zhiji. The company promotes the construction of new energy vehicles, 5G communication parts and moulds of the IPO project according to the pace, the main project of 1H23 is completed, some production lines are debugged and operated, waiting for capacity climbing to accelerate and improve gross profit margin performance. The company established a wholly-owned subsidiary in Maanshan, Anhui Province, to build new energy vehicle structure and 5G communication base station structure project, the company expects 1H24 to complete 2H24 and put into production, in addition, the company plans to establish a base in North America and Mexico, the dual-threaded layout of domestic and foreign capacity will help to meet the platform-level new products needs of several customers and accelerate new market development at home and abroad.

Entering the integrated die casting expansion capacity circle, the customer development progress is expected to look forward to the company's own mature technical experience in aluminum alloy structures and super large aluminum alloy die castings in the communication field, homeopathy integrated die casting. Some samples of the large magnesium alloy die casting project jointly operated by 1H23 and the National magnesium Center of Chongqing University have been trial-produced, 7000T/8000T large integrated die casting technology has been applied, and the yield can reach 90% + We are optimistic that the company will expand to larger die-casting tonnage and more integrated products in the future.

Risk tips: customer development is not as expected; downstream demand is not as expected; 5G base station construction is not as expected.