Summary of events: the company released three quarterly reports in 2023. In 2023 Q1-Q3, the company achieved revenue of 46.253 billion yuan, a decrease of 11.7% over the same period last year, a net profit of 438 million yuan, an increase of 507.2%, and a non-return net profit of 373 million yuan, an increase of 1328.9% over the same period last year. 2023Q3, the company achieved revenue of 15.546 billion yuan, down 13.0% from the same period last year and 4.8% from the same period last year; the net profit from home was 103 million yuan, down 189.8% from the same period last year and 14.8% from the previous year; and the net profit from non-return was 108 million yuan, down 183.2% from the same period last year and 23.0% from the previous year.
Comments: Q3 gross profit increased year-on-year
① 2023Q3 vs 2023Q2:2023Q3 's homing net profit decreased by 18 million yuan compared with the previous month, while other / investment income (- 30 million yuan), fair value change (- 22 million yuan), impairment loss (- 31 million yuan), minority shareholders' profit and loss (- 16 million yuan), non-operating income and expenditure (- 4 million yuan) all decreased. The profit increase mainly lies in gross profit (+ 66 million yuan), income tax (+ 19 million yuan), fees and taxes (+ 1 million yuan).
The homing net profit of ② 2023Q3 vs 2022Q3:2023Q3 increased by 217 million yuan compared with the same period last year, and the main increasing points were gross profit (+ 355 million yuan), impairment loss (+ 11 million yuan), etc. The main interest reduction points include fees and taxes (- 30 million yuan), other / investment income (- 38 million yuan), fair value changes (- 2 million yuan), non-operating income (- 5 million yuan), income tax (- 23 million yuan) and minority shareholders' profit and loss (- 50 million yuan).
The core focus of the future: the company's capacity continues to expand, equity incentives promote the company's long-term development ① to promote the national strategic layout plan, the company's capacity continues to expand. With the production of Youfa in Shaanxi and Guoqiang in Jiangsu, and the gradual commissioning of the new Youfa project in Tangshan, the company's production capacity will continue to increase, and it is expected that the company's production and sales volume will reach 17 million tons in 2025, which will effectively expand brand influence and market share. and then enhance the company's sustainable profitability and comprehensive strength.
② Company speeds up the adjustment of product structure and enriches product category construction. The company actively arranges downstream scaffolding and climbing products. When the convertible bond project reaches production, it will increase the production capacity of 2 million tons of galvanized plate buckle scaffolding and 180000 tons of climbing scaffolding, speed up the extension of industrial chain, enrich category construction, optimize product structure and boost profitability.
③ equity incentive is launched to help the company's long-term development. In August 2022, the company announced the "win-win No. 1" stock option incentive plan, as well as the "Co-create No. 1" and "sharing No. 1" employee stock ownership plans, and plans to add net profit assessment indicators to fully mobilize the enthusiasm of employees.
Profit forecast and investment advice: the company has always maintained a leading position in the industry, with the gradual launch of production capacity, we believe that the company's production and sales are expected to continue to increase, while product restructuring may further increase profits, 2023-2025 net profit is expected to be 6.02,7.73 and 896 million yuan respectively, corresponding to the October 24 closing price of PE is 15,12 and 10 times, respectively, to maintain the "recommended" rating.
Risk hint: raw material prices rise, downstream demand is lower than expected, capacity release is not as expected.