Main points of investment

Event: the company recently released its three-quarter report of 2023, with revenue / net profit attributable to mother / net profit deducted from non-return to mother 10.312 billion / 401 million / 384 million in the first three quarters of 2023. Compared with the same period last year, the revenue / return net profit / deduction of non-return net profit of 3Q23 revenue / net profit / deduction of non-return net profit was 3.781 billion / 120 million / 140 million, and + 9.31%, 25% and 74.63% respectively, respectively.

1. Revenue is stable and improving in the first three quarters, and the customer structure continues to be optimized. In the first three quarters of 2023, the company had revenue of 10.312 billion, a year-on-year increase of 7.7%. 1) the customer structure of the supporting market has been continuously optimized, and the proportion of high-end customers and new energy customers has increased steadily; 2) lead-acid new products have been iterated and upgraded continuously, and the sales volume of new products has continued to grow. The rapid release of EFB batteries, parking air conditioning batteries and auxiliary batteries of new energy vehicles have all achieved great growth compared with the same period last year.

2. The gross profit margin continues to improve, and the net profit is higher than expected. 1) Gross profit margin: in the first three quarters, the gross profit margin is 14.6%, compared with the same period last year + 1.12pctscape 3Q23 gross profit margin is 14.6%, year-on-year + 2.28pctscape 2) expense rate: the rate of three expenses in the first three quarters is 8.15%, year-on-year + 0.35pct, R & D expense rate + 0.39pctscape 3) the net profit in the first three quarters is 401 million, which is + 33.86% compared with the same period last year.

3. 17 low-voltage lithium batteries have been harvested, and the transformation of new energy has been accelerated. Low-voltage lithium power has been designated for 17 new projects, which has accelerated the transformation of new energy strategy and promoted the upgrading of the full range of low-voltage product matrix. at present, the company's low-voltage products basically cover mainstream car companies. In 2022 and the first half of 2023, 26 and 17 project assignments were obtained respectively. The main customers include European car companies, Geely, Chery, Great Wall, FAW Liberation, Red Flag, New Power of car Building, etc.

Investment strategy:

The company is expected to make a net profit of $1.42 billion in 2025, maintaining a "buy" rating.

Risk Tips:

Raw material price fluctuation risk, new energy business risk, exchange rate fluctuation risk and so on.