Event description
In the first three quarters of 2023, the company realized operating income of RMB 9.387 billion yuan, down 11.12% year-on-year; realized net profit of RMB 633 million yuan, down 37.59% year-on-year; realized net profit of RMB 367 million yuan deducted from non-parent, down 55.15% year-on-year.
Event comment
In the third quarter, the company realized operating income of RMB 3.301 billion yuan, down 8.96% year-on-year; net profit attributable to parent was RMB 209 million yuan, down 45.37% year-on-year; net profit deducted from non-parent was RMB 169 million yuan, down 19.85% year-on-year. Non-recurring gains and losses in the third quarter were mainly government subsidies of 54.84 million yuan. Compared with the same period last year, the gross profit margin of the Company increased by 1.23pct in the third quarter, but the net interest rate decreased by 3.61pct, mainly due to the year-on-year increase of 147 million yuan in financial expenses (fluctuation of US dollar exchange rate) and the year-on-year decrease of 145 million yuan in net investment income (associates & joint ventures).
In terms of sub-business, in the first three quarters, the big family numerical control (PCB equipment) realized operating revenue of 1.14 billion yuan, down 47% year-on-year, with a year-on-year decrease of 1 billion yuan in operating revenue, which was the main source of influence on the revenue end during the reporting period;IT business mainly served large customers in North America, and there was no significant fluctuation in terms of the stock volume of new customers, so the company's consumer electronic equipment maintained a normal prosperity during the reporting period; Lithium-ion battery equipment has sufficient orders in the medium term, and the progress of engine development affects revenue recognition to a certain extent, but the company's profit level is expected to continue to improve; the boom degree of high-power welding & cutting equipment is basically the same as last year, and the business has a high correlation with macro-economic boom degree. From the perspective of domestic GDP growth rate in the third quarter, it is expected to meet the recovery inflection point. We expect revenue to be similar to that of the same period last year as equipment acceptance is confirmed in the fourth quarter.
We believe that the company, as an upstream equipment supplier, is more sensitive to the demand of the industrial chain. In addition to new energy sources, the company's downstream customers have reduced their willingness to expand production and upgrade equipment capital expenditure in the past two years under the condition of weak demand and continuous destocking. The Company continued to increase resource investment in new energy industries such as photovoltaic industry and power battery industry, and increased R & D investment in semiconductor industry and core devices. We are optimistic about the pull of the intelligent terminal innovation cycle in 2024 on the company's equipment demand. It is estimated that the EPS of the company from 2023 to 2025 will be 0.90, 1.17 and 1.57, and the corresponding PE will be 23x, 18x and 13x respectively.
Risk hint
1. Consumer electronics recovery is less than expected;
2. The expansion of new energy equipment has declined.