Looking to the future, due to the lower-than-expected progress of overseas production expansion, and the supply of domestic small and medium-sized enterprises is still dominated by Chinese and foreign layered sand, we expect that the price of inner sand is expected to remain high in mid-2024, and the commissioning of the second phase of the project will support the company's continued growth. At the same time, the company's semiconductor business continues to expand, the market share has increased, and the product structure has been continuously optimized. The company's performance trend is upward, and the static PE valuation has been digested to around 5x 6x, maintaining the "buy" rating.
The results in the first three quarters of 2023 increased by 638.32% compared with the same period last year. The company released its three-quarter report for 2023, with an operating income of 5.9 billion yuan, an increase of 378.27% over the same period last year, and a net profit of 4.207 billion yuan, an increase of 638.32% over the same period last year. Among them, the operating income in the third quarter was 2.466 billion yuan, an increase of 359.51% over the same period last year, and the net profit was 1.776 billion yuan, an increase of 531.40% over the same period last year.
The price of photovoltaic high-purity sand rose slightly and slowly, and the production of new projects ushered in an increase in the fourth quarter. In terms of photovoltaic high-purity sand production and sales, the current production capacity of the company is basically full, and we estimate that production and sales fluctuate little month-on-month in the third quarter. According to the company announcement, as the company's second phase of the 60,000-ton high-purity sand project will be gradually put into production in the fourth quarter of this year, it will support the further growth of the company's high-purity sand production and sales. In terms of price, with the rebound of downstream operating rate and the commissioning of N-type silicon wafers in the third quarter, the supply and demand of high-quality quartz sand continues to be tight, and the price of inner sand is rising slowly. Looking to the future, as the progress of overseas production expansion is not as expected, and the supply of domestic small and medium-sized enterprises is still dominated by Chinese and foreign layered sand, we expect that the gap in the middle and inner layer sand in 2024 will mainly be filled by the second phase of quartz shares, and the price of middle and inner layer sand is expected to remain high in the future.
The semiconductor business has maintained rapid growth and improved profitability. The company has mastered electric fusion, gas fusion and continuous melting technology, and successfully passed the certification of Tokyo Electronics High temperature Diffusion Link in 2019, becoming the third company in the world and the only one in China that has passed the semiconductor high temperature certification. American Lam, AMAT and domestic manufacturers have also passed the certification one after another.
After small batch procurement in previous years, the company's product quality and production stability have been continuously recognized by customers, and semiconductor business revenue has continued to grow rapidly during the downturn in industry demand in 2023. Superimposed company 6000 tons of electronic grade quartz project can fully reach production in 2023, we expect that the company's semiconductor business revenue is expected to maintain more than 50% growth in the future. At the same time, the company's high-end semiconductor products continue to increase the proportion of sales, product structure optimization, profitability is expected to continue to rise.
Risk factors: photovoltaic and semiconductor demand is lower than expected; the company's new capacity production schedule is not as expected; industry supply-side competition is intensified; overseas production expansion is higher than expected.
Earnings forecast, valuation and rating: considering the tight supply and demand of high-purity sand and the continued growth of the company's semiconductor business performance, we slightly raised the company's 2023 EPS forecast to 16.73 yuan (the original forecast was 15.45 yuan), maintaining the 2024-2025 EPS forecast of 28.36 yuan 35.97 yuan. Considering that the PE valuation of Oujing Technology, which is in the lower reaches of the industry chain, is about 10x in 2023 (based on the unanimous expectation of Wind), we give the company 10x PE in 2023 with a target price of 155RMB and maintain a "buy" rating.