Event: on October 27, 2023, the company released its quarterly report for 23 years, with operating income of 1.004 billion yuan in the first three quarters,-31.29% of the same period last year, and net profit of 125 million yuan,-43.86% of the same period last year.
The performance is in line with expectations. Quarterly, 23Q3 achieved revenue of 326 million yuan, year-on-year-30.71%, month-on-month + 4.41%; return to the mother net profit of 43 million yuan, year-on-year-48.87%, month-on-month + 0.01%. 23Q3 performance dropped sharply compared with the same period last year, mainly due to the impact of overseas interest rate increases and conflicts between Russia and Ukraine, the overall demand downstream was weak, and 23Q1's main customers began to enter the destocking stage.
The gross profit margin improved compared with the same period last year, and the expense rate increased year-on-year. 1) Gross profit margin: the gross profit margin of the company in the first three quarters was 31.56%, which was + 3.47pct compared with the same period last year. Among them, 23Q3 gross profit margin is 31.93%, year-on-year + 3.70pct, month-on-month-1.51pct. The increase in gross profit margin compared with the same period last year is mainly due to: 1) the decline in the price of raw materials; 2) the company continues to improve its supply chain management capacity and reduce production costs; 3) the proportion of Micro Touch products with high gross margin increases. 2) period fee: the company's period expense rate is 14.92% in the first three quarters, which is + 7.64pct compared with the same period last year.
Among them, the rates of sales, management, R & D and financial expenses were 5.17%, 6.19%, 4.79% and-1.23% respectively, which were + 2.25,0.87, + 1.96 and + 2.56pct respectively compared with the same period last year.
Actively promote investment mergers and acquisitions to achieve diversified business development. 1) acquire MicroTouch, a touch brand owned by 3M Company, lay out OBM business, and significantly improve the company's profitability. 2) acquire 70% of Hongtong Technology and expand the business of intelligent cockpit display in vehicles. 3) take a 30% stake in Shaanxi Ruixun, improve the efficiency and capability of motherboard R & D and whole system design, and lay out the Internet of things and marginal computing market; 4) invest in ITH2.2% equity, establish close ties with upstream chip companies, and obtain certain investment returns. We believe that the company through epitaxial mergers and acquisitions will achieve product line expansion and industrial chain extension, enhance the core competitiveness.
Profit forecast: taking into account the weak demand in the downstream market, the 23-25 net profit is lowered to 1.75,3.30 and 303 million yuan (the previous value is 1.86,3.59 and 319 million yuan), maintaining the "buy" rating.
Risk hint: the lower-than-expected risk of downstream demand recovery; the lower-than-expected risk of new business development; the release of new capacity less than expected risk; the risk of price fluctuations of major raw materials.