Announcement: the company released the three-quarter report of 2023, with operating income of 9.387 billion yuan in the first three quarters of 2023, a decrease of 11.12% over the same period last year, a net profit of 633 million yuan, a decrease of 37.59% over the same period last year, and a deduction of 367 million yuan in non-return net profit, a decrease of 55.15% over the same period last year. In the single quarter of Q3 in 2023, the company achieved operating income of 3.301 billion yuan, a decrease of 8.96% over the same period last year, a net profit of 209 million yuan, a decrease of 45.37%, and a non-return net profit of 169 million yuan, a decrease of 19.85% over the same period last year. Last year, the non-recurrent profit and loss of Q3 was mainly non-current assets disposal profit and loss and more investment income.
PCB revenue decline is a slowdown in downstream customer investment. In the first three quarters of 2023, due to macroeconomic fluctuations, the demand of the PCB industry slowed down, and the investment in downstream customer equipment slowed down and postponed. According to the third quarterly report of the subsidiary Dazu CNC, the revenue of PCB business in the first three quarters of 2023 was 1.14 billion yuan, year-on-year-46.88%, gross profit margin 35.91%, year-on-year-1.30pct, and homing net profit rate was 13.98%, year-on-year-4.67pct.
In the single quarter of Q3 in 2023, Dazu CNC had revenue of 369 million yuan, year-on-year-12.47%, gross profit margin of 35.45%, year-on-year-0.46pct, and home net profit rate of 17.34%, year-on-year + 6.02pct.
The improvement of investment real estate is a change in accounting policy, and the active construction of the company has led to an increase in the number of projects under construction. At the end of the third quarter of 2023, the final balance of the company's investment real estate was 2.983 billion yuan, which was much higher than that of the same period last year, mainly due to the change of accounting policy of investment real estate to fair value measurement. At the end of the third quarter of 2023, the final balance of the project under construction is 695 million yuan. The reason for the increase is that the company is actively building Yachuang Industrial Park, Yibin New Energy equipment Industrial Park and other projects.
The gross profit margin has improved compared with the same period last year, the fluctuation of the US dollar exchange rate has led to an increase in the rate of financial expenses, and the company has focused on R & D investment. In the third quarter of 2023, the company's gross profit margin was 38.17%, year-on-year + 1.23pct, and homing net profit rate was 6.32%, year-on-year-4.22pct. In 2023 Q3, the company's sales, management and financial expense rates were 11.07%, 7.54% and 1.34% respectively, which were + 0.24pct, + 0.19pct and + 4.18pct respectively compared with the same period last year. The increase in sales and management expense rate compared with the same period last year was due to the impact of fluctuations in the exchange rate of the US dollar. Q3 in 2023, the company's R & D expenditure rate is 12.54%, compared with the same period last year + 1.02pct. The company pays attention to R & D investment and continues to deepen the technology moat.
Profit forecast and investment advice: taking into account the weak demand in the PCB industry, we slightly revised the company's profit forecast to show that the company's revenue in 2025 is 138.02 yuan, 165.22 yuan and 19.812 billion yuan respectively, which is-7.8%, + 19.7% and + 19.9% respectively compared with the same period last year. The projected return net profit is 9.09,15.48 and 1.913 billion yuan respectively,-24.8%, + 70.2% and + 23.6% respectively. The PE corresponding to the closing price on October 24, 2023 was 23.5,13.8 and 11.2 times, respectively, maintaining the "overweight" rating.
Risk tips: downstream demand recovery is not as expected, key customer innovation is not as expected, and industry competition is intensified.