Main points of investment
What happened: the company released its third-quarter report in 2023. According to the report, the company achieved operating income of 1.137 billion yuan in the single quarter of Q3 in 2023, an increase of 17.68% over the same period last year and 5.38% month-on-month growth. Net profit / non-return net profit of 3.14 / 297 million yuan, an increase of 37.94%, 37.17%, and 26.21%, 22.63% compared with the same period last year. In addition, the company's profitability continued to improve, with Q3 sales gross margin of 42.73% and net profit margin of 27.64%. The five figures once again hit a single-quarter all-time high.
Vacuum products thrive and the semiconductor photovoltaic market has a bumper harvest. Since 2022, photovoltaic cells have set off an iterative wave from P-type to N-type. The large-scale construction of battery manufacturers has given birth to a large number of vacuum pump demand, which makes the company's vacuum business like a fish in water. In addition, the continuous expansion of global semiconductor production capacity has also opened up more space for the vacuum pump market. As a member of the domestic integrated circuit localization parts innovation alliance, the company has begun to supply semiconductor vacuum pumps in bulk to downstream chip manufacturers. In the future, through the continuous expansion of vacuum product business, the company is expected to continue to optimize product structure and steadily improve profitability while creating a larger revenue scale.
Compressor business has a solid foundation, and the demand for cold chain logistics continues to release. The company's compressor business is not only the mainstay of its growth process, but also the company's traditional strength since its inception. With the proposal of the Development Plan of Cold chain Logistics in the 14th five-year Plan and the steady progress of the construction of related base facilities, the scale of the national cold chain logistics market is growing at a rapid rate. In this context, as the key equipment of the cold chain logistics industry, the demand of refrigeration compressor is also accelerating. The company's series of products are energy-saving and efficient, with a full range of categories, and have been innovating continuously according to market feedback for many years, which not only continuously empowers downstream enterprises, but also contributes to the overall income of the compressor business.
Profit forecast and valuation: in view of the large-scale capacity expansion of the photovoltaic industry this year and the strong demand for photovoltaic vacuum pumps, combined with the performance of the company in the first three quarters, we expect the company to achieve operating income of 39.90 pounds in 2023-2025 (46.67 yuan in 2023-2025). The net profit of returning to the mother is 7.97 pounds 9.59 / 1.216 billion yuan (the original value from 2023 to 2025 is 7.26 pounds 9.59 / 1.216 billion yuan). According to the relative valuation method of comparable companies, we give the company 20 times PE in 2024, corresponding to the target price of 35.80 yuan, maintaining a "buy" rating.
Risk tips: semiconductor vacuum pump business is not as expected, photovoltaic cell capacity expansion is not as expected, macroeconomic prosperity is not as expected, technology update is not as expected.