Event: on October 26, 2023, the company released its third quarterly report for 2023. In the first three quarters of 2023, the company achieved operating income of 4.325 billion yuan, an increase of 13.31% over the same period last year; net profit of 583 million yuan, down 3.48% from the same period last year; and non-net profit of 539 million yuan, down 4.84% from the same period last year.
Order delivery is extended and the performance phase is under pressure. From a quarterly point of view, 23Q3 achieved revenue of 1.374 billion yuan (- 1.13%) and net profit of 157 million yuan (- 22.04%). In the third quarter, due to the severe macro environment and customer changes, the order delivery was extended and the revenue fluctuated in the same period. The decrease in the proportion of sales in the high gross margin sector led to a decline in gross profit margin and a more obvious decline in profit. From a sub-plate point of view, the preparation plate benefited from the development of aseptic injection business, while the proportion of biotechnology plate decreased due to the high base of COVID-19 business. From a sub-regional point of view, the company continued to increase overseas investment and order delivery, and the proportion of overseas business increased month-on-month in the third quarter.
Sales costs continue to increase and the rest of the rates remain stable. In the first three quarters of 23, the company's sales expenses were 245 million yuan (+ 45.60%), and the sales rate was 5.67% (+ 1.17pp), which was caused by the increase in sales staff and marketing. The management fee is 382 million yuan (+ 6.39%), the management rate is 8.84% (- 0.57pp), and the rate remains stable. The R & D cost is 270 million yuan (+ 16.01%), and the R & D rate is 6.23% (+ 0.15pp). Financial rate-1.21% (- 1.15pp).
Contract liabilities remain high and capacity expansion is under way. As of 2023Q3 company contract debt 3.55 billion yuan (- 16.51%), compared with the same period last year, but still maintained at a high level; fixed assets of 766 million yuan (+ 10.42%), the company Dongtai base construction part of the consolidation, the purchase of new industrial plant. In October 22, the company was approved to actively expand the production capacity of back-end superior equipment such as freeze-dryers, while cutting into new businesses such as CGT and consumables. At present, the biopharmaceutical equipment industry trial production center project, Jiangsu biomedical equipment industrialization base project, Zhejiang Dongfulong biological life science industrialization base project and pharmaceutical system equipment production base are still under construction to further lay the foundation for industrialization.
Profit forecast and investment advice: combined with the third quarter results and orders, we adjusted the company's operating income from 2023 to 2025 to 59.15,71.19 and 8.604 billion yuan (before the adjustment was 65.77,79.30 and 9.599 billion yuan), an increase of 8.16%, 20.34% and 20.85% over the same period last year. The net profit of homing was 7.81,9.44 and 1.152 billion yuan respectively (before the adjustment was 9.64,11.33 and 1.34 billion yuan), an increase of-7.77%, 20.94% and 21.97% over the same period last year. Considering that the company is a rare leader in the integration of equipment and consumables, there is a wide space for domestic alternatives, and the superimposed overseas business will further open up the market space and maintain the "buy" rating.
Risk hint: the product volume is not as expected, the product export is not as expected, the capacity expansion is not as expected, the public data used in the research report may have the risk of lagging behind or not updating in time, and the industry scale measurement deviation risk.