Event: Q3 company realized business income of 1.275 billion yuan, + 69.43% of the same period last year, realized net profit of 14.4691 million yuan, reversed losses, and deducted 1.4798 million yuan of non-return net profit.

The restructuring completed the focus on hot and cold undertakings, and the income side continued to grow at a high level. Q3's revenue reached another record high in a single quarter, mainly because the company has completed the acquisition and reorganization of Songyang compressor, Songyang chiller and Songyang refrigeration, and the table effect overlays the business synergy development effect. we expect the company to enter a new steady-state growth stage in the future.

Gross profit margin improved compared with the same period last year, and impairment losses affected profit performance. Q3 achieved a gross profit margin of 17.54%, year-on-year + 3.67pct. We believe that on the one hand, the reason for the increase in gross profit margin is that the company improves production efficiency and accelerates digital transformation. On the other hand, it is due to the relatively high gross profit margin of Songyang compressor and Songyang cold machine business, which was reorganized by the company in November last year, which led to the increase of gross profit margin of the company as a whole. From the perspective of expense rate, Q3 company's sales, management, R & D and financial expense rates are respectively year-on-year + 0.61pct, + 0.28pct, + 0.88pct, + 0.35pct. We believe that the increase in expense rate is due to the change in the scope of the table. Q3 company recorded a credit impairment loss of 23.49 million yuan, compared with 2.02 million yuan in the same period last year, which had a certain impact on the company's profit performance.

The efficiency of inventory and accounts receivable increased slightly, and operating cash flow improved.

1) the monetary capital of the company at the end of Q3 is 810 million yuan, which is 2.082 billion yuan more than the total amount of accounts receivable and notes receivable at the end of 23H1, and the total contract liabilities at the end of 23H1 + 4.51%, which is 8.27% lower than that at the end of 23H1.

2) in terms of cash flow, the net operating cash flow of the company's 23Q3 was-39.48 million yuan, compared with-106 million yuan in the same period last year, mainly due to the increase in cash received from the sale of goods and services.

3) in terms of turnover, the turnover days of inventory / accounts receivable / accounts payable at the end of 23Q3 are-1.55,3.86 and-6.22 days respectively compared with those at the end of 22H1, and the efficiency of inventory and accounts receivable is slightly improved.

Profit forecast and investment rating: we expect the company to achieve operating income of 4.933 billion yuan in 2023-2025, year-on-year + 70.5%, 24.7%, 24.7%, 23.4%, and estimated net profit of 1.14, 278, and 433 million, respectively. Year-on-year + 522. 2%, "144.9%," 55.6%. The corresponding PE is 38.5, 15.7, and 10.1 times, maintaining the "buy" rating.

Risk factors: the winning of the project is not as expected, the promotion of the high-bid project is not as expected, the promotion of cold chain logistics policy is not as expected, the integration of Panasonic refrigeration assets is not as expected, the cost of raw materials fluctuates greatly, and so on.