Camel Co., Ltd. releases three quarterly results for 2023. The company 2023Q1-3 achieved revenue of 10.31 billion yuan, an increase of 8% over the same period last year, of which 23Q3 revenue was 3.78 billion yuan, + 9% year-on-year and + 17% month-on-month. 23Q1-3 made a non-return net profit of 380 million yuan, + 18.9% compared with the same period last year, of which 23Q3 deducted non-140 million yuan, + 75% compared with the same period last year, and + 16% compared with the previous year.

The profitability of Camel shares is stable. The company's 23Q1-3 gross profit margin is 14.6%, year-on-year + 1pct; net profit margin is 3.9%, year-on-year + 0.7pct; Roe is 4.4%, year-on-year + 0.9pct.

Production and operation are sound. According to the company's "announcement on the main operating data from January to August 2023", the production and operation of Camel shares is sound. The company actively implements the "Top Ten key measures of the Group in 2023", continues to promote the transformation of new energy and internationalization strategy, and the sales of automotive low-voltage batteries in its main business continue to grow.

It is expected to benefit from the improvement of commercial vehicles. According to the company's mid-2023 report, Camel Automotive low-voltage lead-acid battery products include starting battery, start-stop battery, new energy vehicle auxiliary battery, commercial vehicle parking air-conditioning battery and so on. Automotive low-voltage lead-acid battery capacity, sales, market share ranked first in the country for many years. We believe that with the recovery of freight rates, commercial vehicles such as heavy trucks have ushered in a significant restoration of prosperity.

Camel's low-voltage lithium products have been more targeted, multi-level, rich low-voltage lithium product matrix can better cope with potential market changes and cover more customer demand. According to Shanghai Stock Exchange e-interaction, by July 2023, the company's 12V lithium battery has achieved the fixed points of Geely, Great Wall, Chery, Dongfeng, some new car-building forces, European and American car companies, etc.; 24V lithium battery has achieved the location of FAW Liberation, BAIC Futian, Dongfeng commercial vehicle, Sany, Yutong and other projects; 48V lithium battery has won the project location of Dongfeng Nissan, BAIC and Volkswagen.

The maintenance and replacement market is expected to continue to grow. The upgrading of automotive battery products and the upgrading of vehicle electrical architecture and intelligence have led to the growth of bicycle capacity and value, which is conducive to the further growth of the industry scale. Among them, the passenger car start-stop battery has entered a centralized replacement cycle, and commercial vehicles equipped with parking air-conditioning batteries have become the choice of more and more car owners.

Profit Forecast and Investment advice: we expect Camel shares to achieve revenue of 155x170PE in 2023-24-25, a net profit of 7.5x1xxxxxxxxxxxxxxxxxxxxxxxxx. With reference to the comparable company, the company is given 15-17x PE in 2023, corresponding to a reasonable value range of 9.53-10.81 yuan. Maintain the "better than the market" rating.

Risk hint: car sales fell short of expectations, and raw material prices rose sharply.