Event: the company released its Triple report for 2023. In the first three quarters of 2023, the company achieved operating income of 491 million yuan, a year-on-year decrease of 20.87%, a net profit of 12.84 million yuan, a decrease of 90.51%, and a non-return net profit of-7.83 million yuan, a decrease of 136.19 million yuan over the same period last year. In a single quarter, 2023Q3, the company achieved operating income of 208 million yuan, an increase of 31.55% over the previous month, an increase of 65.10% over the same period last year; realized net profit of-4.02 million yuan, a decrease of 19.08 million yuan, and a decrease of 37.94 million yuan over the same period last year; and realized deduction of non-homed net profit of-2.65 million yuan, a decrease of 7.19 million yuan from the previous month, and a decrease of 3282 yuan over the same period last year.
Comments: the main business continues to improve month-on-month, and the volume of new products leads to an increase in gross profit margin? Price: in the first three quarters of 2023, the company's gross profit margin was 15.72%, down 20.42pct from the same period last year, mainly affected by the rising cost of raw materials, the increase in labor and manufacturing costs per unit product due to insufficient production capacity, and the decline in sales of high-margin products. 2023Q3, the company's gross profit margin is 16.86%, increased 4.72pct month-on-month, decreased 24.97pct year-on-year, month-on-month improvement is mainly due to the gradual volume of silver-coated copper powder brought about product structure adjustment, while nickel powder sales continued to increase, driving 23Q3 gross profit margin month-on-month increase.
Expenses: during the period of 2023Q3, the proportion of expenses to revenue is 16.65%. The month-on-month increase in 9.58pct is mainly due to the increase in R & D costs and the decrease in exchange earnings. The R & D cost of 2023Q3 was 22.05 million yuan, an increase of 51.34% compared with the previous month. Affected by the decrease in exchange earnings, the financial expenses of 2023Q3 Company are 1.69 million yuan and 2023Q2 are-12.83 million yuan.
Business analysis: the company's 2023Q1 and Q2 generate non-operating income of 12.06 million yuan and 11.95 million yuan respectively, mainly for one-time government subsidies. Excluding the influence of exchange earnings and non-operating income, the total profit from 2023Q1 to Q3 after excluding the impact is-5.01 million yuan,-8.91 million yuan and-330000 yuan, respectively. The company's 23Q3 main business profit improved compared with the previous month. In the future, with the gradual recovery of the electronics industry, the company's product shipments are expected to continue to increase, and the profit side is also expected to be gradually repaired with the improvement of capacity utilization and product structure optimization.
Core focus: the company's main nickel powder industry gradually recovers with the downstream MLCC industry, and shipments are expected to continue to grow. At the same time, thanks to grading process optimization and technological innovation to improve the quality of small particle size finished nickel powder, the company's small particle size nickel powder new products and car gauge grade nickel powder products are also expected to gradually release, and profit disturbance factors are expected to gradually digest to achieve both revenue and profit growth. Silver-clad copper powder 2023H1 has achieved cumulative shipments of more than 3 tons, and shipments are expected to further increase in the second half of the year, contributing to the increment of performance; the pilot production line project of nano-silicon powder is expected to be completed by the end of 2023, and the industrialization process is expected to accelerate the opening of new growth space; major shareholders fixed increase in full subscription, demonstrating confidence in the future development of the company.
Investment advice: we believe that the electronics industry demand recovery trend is clear throughout the year, the company's nickel powder business is expected to continue to improve, superimposed 23-year wallet copper powder shipments rapidly increase, the annual performance is expected to show a continuous improvement trend. The industrialization process of nano-silicon powder business is also expected to accelerate, opening up another growth space for the company. The company relies on core technological advantages to build a solid moat, excellent competition pattern, "one body and two wings" layout, growth space can be expected, we adjust the 2023-2025 net profit from homing to the home respectively to 0.48 pounds, the PE corresponding to the closing price on October 26, 2023 is 144-45-26 times, maintaining the "recommended" rating.
Risk tips: raw material price fluctuation risk, new product research and development is not as expected, downstream demand is not as expected.