On October 26,2023, the Company disclosed the performance of the first three quarters. In the first three quarters of 2023, the Company realized revenue of CNY 2.50 billion, with a year-on-year +7.8%; realized net profit of CNY 360 million, with a year-on-year +32.6%; and realized net profit of CNY 350 million deducted from non-parent, with a year-on-year +36.1%. Among them, Q3 realized revenue of 490 million yuan, year-on-year +14.8%; realized net profit of 86 million yuan, year-on-year +29.1%; realized net profit of deduction of 85 million yuan, year-on-year +33.7%.
Q3 performance met expectations, revenue accelerated, refrigeration recovery was obvious. According to the online data of the industry, the sales volume of the refrigerator industry in July was +1.2% year-on-year (domestic sales-8.6%, export sales +8.1%); August sales volume was +12.8% year-on-year (domestic sales decline narrowed, export sales +30% year-on-year), the industry maintained the recovery trend, and the export growth rate was better than domestic sales. Q3 is usually the off-season sales of the company's refrigeration business. It is expected that the refrigeration business will increase slightly. The refrigeration will be released along with the industry demand + the customer expansion process is good. The growth rate is expected to reach 40%+. The decline of supermarket cabinet will narrow. The intelligent retail cabinet will grow rapidly, and the growth rate is expected to reach 30%+. We believe that with the recovery of downstream demand and a new round of customer order confirmation, the Company has a strong certainty of achieving double-digit revenue growth targets for the whole year.
Part of Southeast Asia's business distribution was transferred to direct sales, gross profit margin and sales expense ratio increased significantly, and Q3 profit level was the highest point in recent 4 years. Q3 set up subsidiaries in Southeast Asia, converted part of its distribution and export business to direct sales, superimposed low raw material prices and continuous improvement of product structure, and the gross profit margin of Q3 reached 35.8%, year-on-year +7.9pct.
Q3 sales/management/finance/R & D expense ratio was 9.7%/9.8%/-0.6%/4.8%,+2.9pct/+0.1pct/+5.5pct/-0.6pct year-on-year. The increase in sales expense ratio was mainly due to the change in Southeast Asian business model, and the increase in financial expense ratio was mainly due to the impact of exchange rate (weakening of exchange benefits). Under the comprehensive influence, the net interest rate of Q3 was 14.3% and 18.1%, both of which were 2.2pct higher year-on-year. Single Q3 net interest rate is close to an all-time high (3Q19 at 20.6%).
The proposed share repurchase is used for incentive plan, optimistic about the continuous growth of the company's performance under customer expansion + product structure upgrading. The Company plans to repurchase shares at a price not exceeding RMB24/share (inclusive) for the implementation of employee stock ownership plan and/or equity incentive, with a total repurchase amount of RMB50 - 100 million (inclusive), and the estimated number of shares to be repurchased accounts for 0.54%-1.08% of the total share capital. The low repurchase demonstrates the long-term development confidence of the management, the strategic cooperation between the company and the head customers is stable, and new customers are continuously explored. The refrigerated cabinet + overseas market + intelligent cabinet is expected to provide more increment for the company. With the weakening of individual customer order disturbance, the long-term growth of the company is optimistic.
It is estimated that the company will achieve a net profit of RMB 4.0/4.8/570 million yuan from 2023 to 2025, which is +38.2%/+19.1%/+19.2% year-on-year. The PE corresponding to the current price of the company is 15.0/12.6/10.6x, maintaining the "buy" rating.
Consumption recovery is less than expected; industry competition intensifies; raw material prices fluctuate.