Event: the company recently released its three-quarter report for 2023, with operating income of 6.69 billion yuan in the first three quarters, + 5.8% year-on-year, and net profit of 660 million yuan, + 28.4% compared with the same period last year. In the third quarter alone, the company realized operating income of 2.53 billion yuan (+ 13.4%) and net profit of 250 million yuan (+ 20.1%). Compared with the previous quarter, the change in income in the third quarter was + 16.3%, and the net profit was + 2.7%.

Revenue and gross profit margin continued to rise month-on-month, highlighting a strong moat. While 23Q3 revenue rose 16.3% month-on-month, the domestic average aluminum price rose only 1.8% in the third quarter, reflecting the continued growth of 23Q3 sales. At the same time, gross profit margin also improved 0.33PCT, highlighting strong alpha in the context of weak macro recovery.

Research and development and sales costs have increased, and continue to develop new products and applications. 23Q3 sales expenses increased by 125% month-on-month, sales expense rate reached 1.1%, month-on-month increase of 0.5 0.1PCT; research and development expenses reached 61.74 million yuan, an increase of 13% month-on-month, R & D expense rate reached 2.5%, a month-on-month decrease of 0.1PCT. The company continues to develop new materials and products in line with the technological development trend of the industry, such as new iterative products characterized by wide width, high strength, thinning and so on.

The commitment not to reduce the shares demonstrates the confidence and recognition of the major shareholders. On September 7, the company announced that the controller and Pingyang Chengpu Investment Partnership (Limited Partnership) voluntarily promised not to reduce their holdings in the next six months, demonstrating strong confidence in the company's strategic development and full recognition of the company's long-term investment value and future development prospects.

It is predicted that the company's earnings per share from 2023 to 2025 are 0.84,0.95,1.07 yuan respectively, and the valuation is based on the PE method. According to the comparable company's 23-year price-to-earnings ratio of 21 times, the corresponding target price is 17.64 yuan, maintaining the buy rating.

Risk hint

Chongqing factory capacity release lower than expected risk, aluminum plate, strip and foil processing fee lower than expected risk, industry production capacity release too fast risk, macroeconomic growth slowdown, the risk of repeated global epidemic, new application expansion is not as expected risk.