The performance of 23Q3 is higher than the same period last year, and the target of equity incentive is expected. In May 23, the company issued an equity incentive plan with a performance evaluation target of not less than 50% year-on-year growth of operating income (or return to home net profit) for 23 years. In the first three quarters of 23, the company achieved operating income of 568 million yuan, + 33.87% compared with the same period last year. To achieve return to the mother net profit of 110 million yuan, year-on-year + 42.52%, equity incentive target can be reached.

The gross profit margin is higher than the previous month, and the company attaches importance to R & D investment. 1. Gross profit margin: 23Q3's gross profit margin is 50.78%, which is + 6.31 pct compared with the same period last year. 2. Period expense rate: the period expense rate of 23Q3 Company is 35.76%, of which the sales / management / R & D / financial expense rate is 15.68%, 4.91%, 15.15% and 0.02%, respectively, and the month-on-month ratio is + 2.14,- 1.11,+ 5.33 and + 1.11 pct. 1) the R & D expense rate increased month-on-month: the company increased R & D investment and continuously improved the product line in the UHD field, driving the company's performance growth; 2) the sales expense rate increased month-on-month: the company expanded overseas business and recruited overseas marketing and technical personnel to continuously enhance the international influence of its products.

Overseas market expansion is smooth, driving the company's performance growth. The company actively promotes the construction of overseas marketing network, and has successfully held product promotion meetings in Dubai, Southeast Asia, Saudi Arabia, the United States, the Netherlands, Turkey, Spain and other regions in the past 23 years, continuously enhancing the international influence of the company's products and deeply tapping the needs of overseas customers.

According to the data disclosed in the company's annual report, the company achieved overseas income of 70 million yuan in 22 years, compared with the same period last year. In 23 years, the company accelerated the expansion of overseas markets, actively expanded dealers, and carried out overseas layout with head enterprises. 23H1's overseas income was + 83.19% compared with the same period last year, and overseas market expansion accelerated.

To grasp the general trend of 4K to 8K industry, video processing equipment is expected to quickly expand. Information video and video ultra-high definition have become the development trend of the global information industry. Video has developed from traditional standard definition and high definition to 4K, and is now developing to 8K and AR/VR. At the same time, the rapid development of 5G communication has laid the foundation for 8K video transmission because of its high bandwidth and low delay. The company's video processing equipment is part of the equipment layer of the UHD industry chain and the core equipment of 8K video, providing image processing, codec, transmission and other functions, will fully benefit from the general trend of 4K to 8K industry, and is expected to achieve rapid volume expansion.

Investment advice: maintain a buy rating. It is estimated that the operating income from 2023 to 2025 will be 10.35 yuan 15.55 / 2.312 billion yuan, with a growth rate of 52%, 50% and 49% respectively; the net profit of the parent will be 1.91 million yuan, 281 yuan, 424 million yuan, and the corresponding pre-PE will be 2.312 billion times that of 30-20-13, maintaining the "buy" rating.

Risk tips: high customer concentration risk; agency procurement concentration risk; technology iterative upgrade risk; market competition risk.