23Q3's home net profit increased by 10.3% over the same period last year, in line with expectations as a whole. According to the three-quarter report of Bao Ti shares in 2023, the company's 23Q1-3 revenue and return net profit were 5.61 billion yuan and 550 million yuan respectively, up 10.1% and 6.9% respectively from the same period last year. 23Q3 revenue and return net profit were 1.9 billion yuan and 170 million yuan respectively, 10.5% and 10.3% higher than the same period last year. During the 23Q1-3 period, the company's gross profit margin and net profit margin were 22.5% and 11.6% respectively, changing 0.8PCT and 1.5PCT respectively over the whole of 22 years.
During the 23Q1-3 period, the company's ROE was 8.58%, an increase of 0.24PCT over the same period last year.
Optimize the product structure, promote technological breakthroughs and capacity construction, and increase the expected volume and profits of 23H2. According to the company's 2022 annual report, 2023 semi-annual report and three quarterly reports, the market has continued to open up key markets at home and abroad in the past 23 years, continuously optimize product structure, and strive to expand the market share of high value-added products. In terms of technology, in the first half of 2023, the company successfully developed super-long, large single-weight and high-performance titanium alloy plates, achieving a breakthrough in domestic unit weight and length. In terms of production capacity, aerospace-grade wide-width titanium construction and other projects have been carried out in an orderly manner. 23Q1-3 titanium production fell 2.3% year-on-year to 24000 tons, sales fell 0.4% year-on-year to 24000 tons, 23-year planned production of 35000 tons. According to Wind, as of October 27, 2023, the average price of 23M1-10 sponge titanium fell 20 per cent from a year earlier. It is expected that with the company's new production capacity, variety upgrading and its economies of scale, as well as cost reduction, the expected profit of 23Q4 will increase.
Profit forecast and investment advice: give the company a "buy" rating. It is estimated that the EPS of the company in 23-25 years will be 2.42 yuan per share, respectively, and the PE corresponding to the closing price on October 27, 23 will be times that of 21-16-14, and the average PE valuation of the company over the past 20 years is 37 times. The company is the leader in the titanium alloy industry, considering to continue to expand production and adhere to innovation to improve the quality of development in the future, with reference to the comparable company valuation, give the company a 23-year valuation of 29 times PE, corresponding to the company's reasonable value of 45.48 yuan per share, and give the company a "buy" rating.
Risk hint. The risk of large fluctuations in raw materials. Downstream demand is lower than expected. The progress of production capacity construction is not as expected. The product certification is not as expected.