Event: the company announced that 2023Q1-3 realized a revenue of 181 million yuan with an increase of 4.32%, a net profit of 8 million yuan with a decrease of 77.07%, and a net profit of 1 million yuan from profit to loss. Among them, the single-quarter operating income of 2023Q3 decreased by 7.85% when it was 71 million yuan; the net profit of 6 million yuan was reduced by 63.85%; and the net profit of non-return was-107800 yuan.
Income growth in the third quarter alone was under pressure, and the profit decline narrowed month-on-month. From a quarterly point of view, the company's Q1-Q3 operating income was 0.34 billion yuan, respectively, with an increase of 6.91%, 17.64%, 7.85%, respectively, and the growth rate of Q3 was under some pressure. The homed net profit was 0.07%, 0.05 billion yuan, respectively, and decreased by 36.67%, 153.90%, 63.85%, respectively. The decline in profits was caused by the reduction of government subsidies in the first three quarters. Q3 revenue and profits in a single quarter decreased compared with the same period last year, or the implementation of short-term projects was delayed due to financial constraints of local governments. Considering the huge storage heating area in China, the demand for intelligent heating related services and products is expected to continue to release, the company as a set automation (OT) + information (IT) + intelligent (AI) one-stop low-carbon intelligent heating overall solution service provider, the current market share is still low, the future growth space is worth looking forward to.
The ability to achieve cash in the first three quarters was optimized, and the increase in the rate of management expenses was a drag on earnings. The Q1-3 gross profit margin of the company is 54.54% with the same reduction of 0.78pct. During the period, the expense rate of 68.60% increased with an increase of 11.54pct, of which the company's sales / management and R & D / financial expense rates were 15.19%, 53.94% and 0.53%, respectively, with a year-on-year change-0.47pct/11.7pct/0.31pct. The significant increase in the rate of management and R & D expenses was mainly due to the fact that the salary paid by the company for employees in the current period exceeded the income growth rate. The loss rate of asset and credit impairment-1.84% decreased by 2.41pct; affected by the increase in expense rate during the period, the return net interest rate decreased by 4.45% compared with the same period last year. 15.85pct. The net cash flow of the company's 2023Q1-3 operating activities was 165 million yuan, which was 13 million yuan more than that of the same period last year; the cash-in ratio of 144.88% increased 39.07pct, and the cash-to-cash ratio of 279.58% decreased 7.01pct. As of the end of September, the scale of the company's accounts receivable and bills, inventory + contract assets, accounts payable and bills, and prepaid accounts + contract liabilities was 4.400.65 billion yuan, respectively, compared with the same period at the beginning of the year. The change was-13.80%, 30.56%, 44.57%, 36.59%.
The company plans to use its own funds to buy back shares, equity incentives demonstrate long-term development confidence. On September 28, 2023, the company put forward a buyback plan, which intends to use its own funds of not less than 7 million yuan (inclusive) and not more than 12 million yuan (inclusive) to buy back shares at a price of not more than 47.04 yuan per share for the later implementation of employee stock ownership plan or equity incentive plan. According to the upper and lower limits of repurchase, the company's repurchase shares are about 148900 to 255100 shares, accounting for 0.11% to 0.19% of the company's total issued share capital. The repurchase of shares with its own funds demonstrates the management's confidence in the future business development, and the subsequent promotion of employee stock ownership or equity incentive scheme is expected to help the company to work as one and lay the foundation for sustainable development.
Investment suggestion: from 2023 to 2025, we expect the company to achieve operating income of 646 million yuan, net profit of 1.49 million yuan, net profit of 2.12 million yuan, EPS of 1.11 pound, 1.58 pound per share, and latest closing price of 23.95, 16.79, 12.65 times of PE, respectively.
Risk tips: delivery is not as expected, downstream customer funds are not as expected, business seasonal fluctuation risk