Event: according to the company's quarterly report for 2023, 2023Q1-Q3 achieved 3.141 billion yuan in operating income, an increase of 50.98% over the same period last year, and a net profit of 292 million yuan, an increase of 32.45% over the same period last year. 2023Q3 achieved an operating income of 1.073 billion yuan, an increase of 33.90% over the same period last year, a decrease of 2.18% from the previous year, and a net profit of 97 million yuan from the previous year, an increase of 0.67% over the same period last year and a decrease of 4.60%.

The company's performance growth is slowing down. The downstream of the company includes photovoltaic, new energy vehicles, consumer electronics, security and so on, of which photovoltaic and new energy vehicles account for about 90%. Affected by factors such as destocking by downstream customers, fierce competition in the industry, and a high base, the company's Q3 performance growth slowed down in 2023; consumer electronics and security accounted for about 10%, and also declined due to downstream demand.

The Q3 gross profit margin of the company improved compared with the previous month. 1) 2023Q1-Q3 's gross profit margin was 19.94%, down 0.69pp from the same period last year, and the net profit rate was 9.28%, 1.30 ppm lower than the same period last year; of which Q3 gross profit margin was 21.37%, down 0.83pp from the same period last year, and 3.87ppp higher than the previous year; the net profit margin was 9.05%, down 2.99pp from the same period last year and 0.23pp from the previous year. 2) during the 2023Q3 period, the expense rate increased by 10.54% compared with the same period last year, with an increase of 2.59pp and a month-on-month increase of 2.51pp, in which the sales expense rate increased by 0.30pp and 0.50ppp; the management expense rate increased by 0.45pp and decreased by 0.05ppp; the R & D expense rate decreased by 0.04pp year-on-year and increased by 0.19ppp; the financial expense rate increased by 1.88pp and 1.87pp compared with the same period last year.

The company binds major customers at home and abroad to speed up the construction of production capacity at home and abroad. The company's core customers include SolarEdge, Enphase, Ningde Times, BYD and so on. At present, there are 8 production bases in China, of which the new production bases in Jiangxi and Anhui have been put into production at the end of 2022. In 2023, we will speed up the deployment and construction of overseas production bases, mainly including North America, Mexico and Europe, Hungary, and expand the capacity of overseas production bases.

Profit forecast and investment advice. It is estimated that the company's net profit from 2023 to 2025 will be 4.85,6.41 and 815 million yuan respectively, and the corresponding EPS will be 1.21,1.60,2.04 yuan respectively. In the next three years, the net profit will maintain a compound growth rate of 26.44%. The company is a domestic one-stop multi-process precision structural parts leading enterprise, maintaining the "hold" rating.

Risk hints: the risk of raw material price fluctuation; the risk of intensified market competition; the risk of large scale of accounts receivable and inventory, etc.