Event: the company released its three-quarter report in 2023, with revenue of 2.95 billion yuan, year-on-year + 25.8%, and net profit of 310 million yuan, + 92.3% year-on-year. In a single quarter, Q3 had revenue of 910 million yuan, year-on-year + 18.0%, month-on-month-13.6%, and mother-to-mother net profit of 100 million yuan, + 222.3% and-7.8%.

The company's performance is growing rapidly, and the export business contributes an important increase. Benefiting from the recovery of the heavy truck industry, the company's performance maintained rapid growth, with revenue of 2.95 billion yuan in the first three quarters, 910 million yuan in revenue of + 25.8% in the same period last year, + 18.0% in the same period last year, and-13.6% in the previous year. The month-on-month decline was mainly due to the off-season impact of the industry. In addition, the company fully enjoys the export dividend of the heavy truck industry. In the first three quarters, the export business income reached 610 million yuan, accounting for 20.7% of the company's revenue. With the increase in overseas customer demand, the company's performance will maintain steady growth.

The decline in the cost of raw materials is beneficial to the improvement of the company's profits. The average price of steel from January to September in 2023 is about 6100 yuan / ton, while the average unit price in the same period last year is about 6600 yuan / ton,-7.6% compared with the same period last year. Benefiting from the decline in raw material costs, the company's gross profit margin in the first three quarters of 2023 was 25.8%, compared with the same period last year, the company's gross profit margin was 27.0%, year-on-year + 8.7pp, month-on-month + 0.7pp, and the company's profitability continued to improve. In terms of expenses, R & D expenses: the company is committed to product research and development, Q3 R & D expenses 70 million yuan, year-on-year + 48.5%, month-on-month ratio + 3.5%, R & D expenditure rate of 7.3%, year-on-year + 1.5pp, month-on-month + 1.2pp, to help the company build technical barriers; financial expenses: Q3 financial expense rate is-0.1%, year-on-year + 0.1pp, month-on-month-0.1pp, mainly due to the increase in Q3 bank financing. Management fees: the rate of Q3 management expenses is 4.9%, year-on-year + 0.3pp, month-on-month + 0.7pp. Overall, the company's Q3 net interest rate is 10.8%, year-on-year + 6.9pp, month-on-month + 0.7pp.

Air suspension performance, plus layout wire-controlled steering. The company's forward-looking layout of air suspension, a number of products have achieved batch supply, the air suspension business achieved 200 million yuan in revenue in the first three quarters, under the requirements of relevant national laws and regulations, the chassis upgrade of the heavy truck industry has become a trend, in the long run, air suspension will further open the company's growth space.

During the third quarter, the company announced the establishment of a subsidiary company and signed a contract with Hannah Wandu (Suzhou) Auto parts Co., Ltd. the company invested 60 million yuan to hold a 60% stake in the joint venture company. Under the background of the increasing requirements of global environmental protection, electric steering system is expected to become an important growth point of the company's future performance with the advantages of low fuel consumption and high steering performance.

Profit forecast and investment advice. It is estimated that the EPS of the company from 2023 to 2025 will be 0.36,0.54,0.69 yuan respectively, and the corresponding dynamic PE will be 18 times, 12 times and 9 times respectively, maintaining the "buy" rating.

Risk hints: market competition risk, raw material price fluctuation risk, lower-than-expected customer sales risk, policy adjustment risk and so on.