On October 24, PUL released its results for the first three quarters of 2023. 23Q3 achieved a revenue of 125 million yuan, an increase of 32.74% over the same period last year; the net profit returned to the mother was 890000 yuan, and the non-net profit was deducted from the mother-1.5 million yuan. In the first three quarters of 2023, the company achieved revenue of 278 million yuan, an increase of 8.16% over the same period last year. The net profit returned to the mother was-30.87 million yuan, and the non-net profit was deducted from the mother-38.42 million yuan.

Q3 revenue is growing rapidly and inventory has increased significantly to verify that on-hand orders continue to be booming. 23Q3 achieved revenue of 125 million yuan, an increase of 32.74% over the same period last year. Under the pressure caused by multiple factors in the first half of the year, Q3 effectively promoted its work, continued to expand new customers and new areas, and gradually increased the operation and maintenance business of previous completed projects, thus achieving better growth in single Q3. As of the end of Q3, the company's inventory was 218 million yuan, an increase of 197.06% over the beginning of the year. The increase in inventory is mainly due to the continuous expansion of the company's business scale and the existence of a certain delivery cycle for large group customer projects, and the cost of delivering customer projects has increased. The current high inventory means that the company's on-hand orders remain high, and as the company's business items are delivered in bulk in Q4 for acceptance, the high water level inventory is expected to support the company to achieve better revenue growth and profit levels this year.

Strengthen the construction of sales team, early investment to lay a good foundation for follow-up growth. In the first three quarters, the company's sales expenses were 45.46 million yuan, an increase of 337.75% over the same period last year. Even considering that the company's construction integration project failed to win the bid in the first half of this year, and the previous project invested more than 25 million yuan in sales expenses, the sales expenses in this period still increased significantly, mainly because the company continued to strengthen the building of the sales team since the beginning of this year. With the company's organizational structure, personnel structure and business layout basically in place, the company's early investment in R & D and sales is expected to gradually realize better business and performance in the following years, and lay a good foundation for follow-up growth.

Profit forecast and investment advice: we expect the company's operating income from 2023 to 2025 to be RMB 922nd 11.50 / 1.408 billion, respectively, and the net profit from its parent to be RMB338 million, corresponding to PE, which is twice that of 24-18-14, maintaining the "buy" rating.

Risk reminder events: the risk of the decline of the prosperity of the petroleum and petrochemical industry; the risk that the business development of the construction industry is not as expected; the risk that strategic customers and new business areas are not as expected; the risk that the promotion of industry innovation is not as expected.