Events:
On October 24, the company released a report for the third quarter of 2023 that its revenue in the first three quarters of this year was 2.497 billion yuan, an increase of 5.02% over the same period last year, and its net profit was-30.517 million yuan, down 150.39% from the same period last year.
Comments:
Under the influence of expenses, profits are under short-term pressure, and revenue growth is waiting for demand to pick up. In the third quarter, the company achieved revenue of 916 million yuan, an increase of 17.49% over the same period last year and an increase of 11.3% compared with the same period last year. The net profit returned to the mother was-19.247 million yuan, a decrease of 121.03% over the same period last year. On the revenue side, the company's revenue improved quarter by quarter this year, and Q1-Q3 achieved revenue of 758 million yuan and 823 million yuan respectively, which is basically back to the level of the second half of 2021. The company's gross profit margin in the third quarter was 10.96%, down 0.27pct from the same period last year, increasing 1.11pct month-on-month, and rising as the crop momentum rate recovered. In terms of profit, the company is mainly affected by the increase in R & D expenses and financial expenses in the third quarter. In order to continue to promote new product verification, the company increased investment in R & D, an increase of 8.82% year-on-year and 23.07% month-on-month. The company's financial expenses returned to normal in the third quarter, mainly due to higher exchange gains and losses brought about by overseas income in the second quarter.
At the same time, the company set aside a total of 12.8806 million yuan for impairment of all kinds of assets in the first three quarters of this year, and the actual operating profit is better than the apparent profit.
Downstream applications continue to expand, opening up the space for growth. Based on the multi-dimensional layout of high-end electronic materials, special composite materials and advanced membrane materials, the company continues to develop new downstream applications. Among them, the company's CBF material has been successfully verified in a number of clients, and a series of products have been formed for application scenarios such as ECP embedding technology and computing chips. High thermal conductivity metal substrate in lighting display, automotive electronics and other fields to develop IPM, IGBT and other high-end markets to achieve batch sales. Functional composites develop downstream application scenarios such as animal medical equipment, 3D mobile phone back shell molding materials, new energy vehicle battery covers, and so on.
With the continuous recovery of downstream demand, the company is expected to achieve rapid performance growth in many areas.
Maintain a "buy" rating. We are optimistic that the company will continue to achieve performance growth under the two-wheel drive of demand recovery and new product breakthroughs. From 2023 to 2025, the company is expected to achieve revenue of 34.74 million yuan, net profit of 0.09 million yuan, and corresponding PE of 614.85, 22.88 and 14.67 times, respectively.
Risk tip: downstream demand is lower than expected, customer introduction is less than expected, profit and valuation are lower than expected.