The company achieved a net profit of 211 million yuan in the first three quarters, + 62.48% year-on-year, and the performance was in line with expectations. As a leading enterprise in the photovoltaic aluminum industry, with the full commissioning of the photovoltaic aluminum components project, we expect the company's production capacity to reach 320000 tons in 2023, with a further increase in market share. In the medium and long term, the aluminum parts project of new energy vehicles will create the second curve of the company's development, while technological transformation superimposed with recycled aluminum projects will significantly improve the company's profitability. In the context of the decline in silicon prices and the high prosperity of the downstream photovoltaic module accessories industry, the company has a high certainty of stable performance growth. We maintain the company's 2023-25 homing net profit forecast of 389 million yuan 532 million yuan, corresponding to the EPS forecast of 2.64 million yuan 3.61 yuan 4.64 yuan, based on the average valuation of comparable companies, give the company 2023 17xPE, maintain the target price of 45 yuan, maintain the "buy" rating.
The net profit of homing in the first three quarters of 2023 was + 62.48% compared with the same period last year, and the performance was in line with expectations. In the first three quarters of 2023, the company realized operating income of 4.713 billion yuan, + 52.85% compared with the same period last year; realized return net profit of 211 million yuan, + 62.48% compared with the same period last year, which was in the range of 1.98 yuan to 229 million yuan in the previous performance forecast, which was in line with expectations; and realized deduction of non-return net profit of 189 million yuan, which was in line with expectations. Among them, the company's 2023Q3 realized operating income of 1.893 billion yuan per quarter, + 83.03% year-on-year; net profit of 83 million yuan, + 112.46%; and non-return net profit of 82 million yuan, + 151.11% over the same period last year. Benefit from downstream photovoltaic installation continues to increase, the company's orders have increased, business performance has maintained steady growth.
Affected by financial expenses and credit impairment, the company's net interest rate decreased slightly. Due to the strong demand for downstream components and the steady release of new production capacity, we expect that the company's profitability will be significantly enhanced in the future under the scale effect.
The aluminum parts project of the new energy vehicle was put into production this year and has been ordered. In May 2022, the company announced the planning of the aluminum parts project for new energy vehicles with an annual capacity of 100000 tons. According to the June investor survey summary released by the company on July 3, the project plans to start production in the fourth quarter of 2023. According to the announcement on the voluntary disclosure of receiving the fixed-point notification of customer models issued by the company on September 25, the company has received the fixed-point notice of the model, and the products sold include battery shell, threshold beam, extended range transfer aluminum bracket and front cabin frame beam, etc. The orderly progress of the new energy vehicle project is conducive to the company's business layout and sustainable development.
Layout of recycled aluminum to expand the upper reaches of the industrial chain. According to the June investor survey summary released by the company on July 3, the company plans to build plants in Vietnam and Malaysia, with a layout of 120000 tons of aluminum frame and 120000 tons of recycled aluminum production capacity, mainly close to the overseas factories of the main customers of the supporting company. At the same time, according to the company's announcement in September, the company plans to raise no more than 1.345 billion yuan for the annual production of 600000 tons of recycled aluminum, which is scheduled to be put into production by the end of 2025.
The company distributes the upper reaches of the industrial chain through the recycled aluminum project, and we expect that after the project reaches production, the company's production cost will be significantly reduced and the product competitiveness will be further strengthened.
Risk factors: the progress of the new layout recycled aluminum project is slow; the release of new capacity is not as expected; downstream photovoltaic installation is not as expected; raw material price fluctuations; international geopolitical risks.
Profit forecast, valuation and rating: as the decline in silicon prices led to an increase in assembly-end production, the company's order volume and shipments increased significantly with the improvement of the downstream boom, and the operating performance maintained rapid growth. At the same time, the construction pace of the company's production expansion project is accelerated, the release of new production capacity and the commissioning of recycled aluminum projects are expected to further improve the profitability and comprehensive competitiveness of the company's products. We maintain the company's annual homing net profit forecast of RMB 389 million for 2023-24-25 and RMB 2.64 for EPS, based on the average valuation level of comparable companies (selecting photovoltaic accessories Foster and Juhe materials as comparable companies, the current Choice consensus estimate of the average PE for 2023 is 17 times), maintain the target price of 45 yuan and maintain the "Buy" rating.