The company announced three quarterly results for 2023: revenue of 552 million yuan / yoy+22.05% in the first three quarters of 23, net profit of 94 million yuan / yoy+55.02%, steady growth of non-return net profit of 081 million yuan / yoy+70.35%, increase in gross profit margin and decline in expense rate led to high performance. Q3 alone, revenue 182 million yuan / yoy+23.48%, return net profit 2419 million yuan / yoy+60.95%, deducting non-return net profit 1859 million yuan / yoy+57.97%, revenue still maintained a growth rate of more than 20% in the first half of the year, confirming that the company's order acceptance continued to be in a relatively full state. The growth rate of return net profit over revenue is mainly due to the contribution of 2.77 million yuan of investment income from Quzhou Coot, a new associated enterprise (mainly engaged in Internet-related strategic investment), and an increase of 2.34 million yuan in non-profit and loss dominated by government subsidies.

Orders for bespoke clothing are full, and overseas growth is even higher. 1) from a product point of view, 23H1 annual customized clothing / consulting transformation / medical materials / other income is 23.65% Universe 43.09% Universe 91.30% Mae 4.2%, accounting for 97% Universe 0.3% Universe 0.1% Plus 2.5%. The company's customized clothing revenue has achieved steady growth. At present, the company's orders are exuberant and supply exceeds demand. The capacity utilization rate of 23H1 suits / shirts is 143% and 110% respectively. 2) from a regional point of view, the domestic / export revenue of 23H1 is + 18.5%, 26.4% and 62%, respectively, compared with the same period last year. Against the background of weak exports this year, the company has maintained relatively high growth overseas, mainly due to the company's increased expansion of overseas markets since the beginning of this year, the establishment of offices overseas, and the smooth expansion of B-end industrial customers such as clothing brands and fashion designers. High stickiness of old overseas customers + actively expand new customers to promote higher growth in export revenue.

In the past 23 years, the increase of gross profit margin and the decrease of expense rate have led to the increase of net interest rate, and the rate of single Q3 expense has increased. 1) Gross profit margin: 23Q1-3 gross profit margin 42.19%/yoy+2.05pct, mainly due to the increase in the proportion of export income due to high gross profit margin (23H1 gross profit margin of 36.74% / 52.65% respectively), single Q3 gross profit margin 40.92%/yoy+1.41pct, continuing the growth trend. 2) period expense rate: 23Q1-3 period expense rate 24.93%/yoy-1.31pct, in which sales / management / R & D / financial expense rate is respectively year-on-year-1.41/+1.35/-0.72/-0.53pct. The expense rate of single Q3 is 28.8%/yoy+1.47pct, and the increase of expense rate is mainly due to the company's active development of domestic and foreign customers, and the sales / management expense rate is + 1.02/+2.08pct to 13.66% Universe 9.44% respectively compared with the same period last year. 3) homing net interest rate: combined with gross profit margin and expense rate changes, 23Q1-3 homing net interest rate is + 3.63pct to 17.09% compared with the same period last year. The net interest rate of single Q3 is + 3.10pct compared with the same period last year, mainly due to the investment income of 2.77 million yuan contributed by Quzhou Coote, a new associated enterprise. 4) inventory: as of 23Q3 inventory 121 million yuan / yoy-3.95%, inventory turnover days compared with the same period last year-19 to 115days, inventory is usually R & D sample clothes and group purchase professional clothes. The company's C2M industry Internet improves production efficiency, inventory and turnover are basically stable.

Profit forecast and investment rating: the company is the leader of private customization, creating C2M industry Internet to achieve large-scale personalized customization. The company's overseas export orders have been good since 22 years, and the domestic business has resumed steady growth in 23 years, the overseas business has continued to grow at a high growth rate, and the overall production capacity has continued to be saturated. In October, the company put into production a new production line and increased its production capacity by 20% to meet the order demand in autumn and winter. Looking to the future, the company has remarkable C2M advantages, profound accumulation of 100 trillion data, smooth expansion of overseas small B customers, continuous high growth of orders, and continuous expansion of domestic categories such as women's wearing. at the same time, the company is preparing to build new plants and production lines and new production capacity to meet the high demand. In the longer term, the company's intelligent manufacturing can be replicated, and it is expected to expand the long-term development space through cross-industry upgrading of the manufacturing industry and the establishment of an industrial Internet development fund for capital empowerment. Considering the fullness of the company's orders and the gradual expansion of production capacity in the future, we raised our 23-25 net profit forecast for 23-25 years from 1.04 to 1.42 million to 1.31 million, corresponding to PE of 34 and 26 to 19X, to "overweight" rating.

Risk tips: market demand fluctuations, raw material prices fluctuate sharply, capacity expansion is not as expected.