Core ideas:

Q3's net profit was 222% year-on-year, slightly exceeding expectations. According to the financial report, the company's 23-year Q1-Q3 achieved revenue of 2.95 billion yuan, an increase of 25.8% over the same period last year. The net profit before and after deducting non-return to the parent was 31pm respectively, an increase of 92.3% over the same period in 22 years. Of this total, the company's 23-year Q3 revenue was 910 million yuan, an increase of 18.0% over the same period last year; the net profit before / after returning to the parent was 9879 / 96.82 million yuan, an increase of 222.2% and 205.7% over the same period last year, slightly exceeding expectations. The steady growth in revenue is mainly due to the recovery of the industry and strong demand for exports, with wholesale sales of 23Q3 trucks + 24.4% / month-on-month-7.5% year-on-year, according to the China Automobile Association.

The profitability of the Q3 industry continues to improve during the off-season. According to the financial report, 23Q3's gross profit margin of 27.0%, year-on-year + 8.7pct/ month-on-month + 0.7pct, still improved in the off-season of Q3 industry, outstanding performance; homing net profit rate 10.9%, year-on-year + 6.9pct/ month-on-month + 0.7pct, on the one hand, benefit from the marginal improvement of gross profit margin, on the other hand, benefit from the reduction of accounts receivable resulting in reduced credit impairment losses. The expense rate during the period is 14.7%, year-on-year + 1.4pct/ ring ratio + 1.7pct. Among them, the sales / management / R & D / financial expense rates are 2.6%, 4.3%, 7.3%, 0.1%, respectively, compared with the same period last year-0.5/+0.3/+1.5/+0.1pct.

Crankshaft & connecting rod benefits from industry recovery + internationalization, emerging business continues to advance. The company has developed into the largest manufacturer of crankshafts and broken connecting rods for commercial vehicles in China. According to the China report, the market share of medium and heavy truck crankshafts has reached 60%, and that of light truck crankshafts has reached 30%. Thanks to the recovery of the industry and the improvement of competitiveness towards internationalization, the company's performance has accelerated its recovery. Relying on its own R & D, processing, casting and forging capabilities, the company cuts into the air suspension and electric steering track to open up the growth space.

Profit forecast and investment advice: the company is the domestic crankshaft-connecting rod leader, the main industry benefits from the industry recovery + internationalization, empty suspension, electric steering to open the growth space. It is estimated that the company's EPS in 23-24 will be 0.36 yuan per share, keeping the company's fair value unchanged at 8.93 yuan per share, corresponding to 25 times PE in 23 years, and maintaining a "buy" rating.

Risk hint. The prosperity of the industry is not as good as expected; the empty development is not as expected; the competition in the industry is intensified.