Event: the company released three quarterly reports. In the first three quarters of 23, the revenue was 16.91 billion yuan (+ 15.77%), and the net profit returned to the mother was 405 million yuan (+ 31.76%). In the third quarter of 23, the revenue was 6.242 billion yuan (- 3.10%), and the net profit returned to the mother was 158 million yuan (+ 4107.86%).
The net profit of returning home increased by 69.26% in the third quarter compared with the previous quarter. In the first three quarters of 23, the revenue was 16.91 billion yuan (+ 15.77%), and the net profit returned to the mother was 405 million yuan (+ 31.76%). The profit growth rate is higher than the revenue growth rate, mainly due to the increase in the net interest rate of sales (2.12% to 2.40%, year-on-year + 0.28pct). Gross profit margin declined in the first three quarters (8.18% to 6.32%, year-on-year-1.86pct), but the proportion of asset and credit impairment has been optimized, mainly due to large fluctuations in the price of copper, the main raw material, high inventory impairment losses, and relatively stable copper prices in the reporting period. On the expense side, the sales / management / R & D / financial expense rate is year-on-year-0.38/-0.11/+0.07/+0.03pct. In the third quarter alone, revenue increased by 2.23% from the previous quarter, and net profit from home increased by 69.26% from the previous quarter.
Projects under construction increased by 90.95% over the same period last year, laying a solid foundation for the company's future performance growth. During the reporting period, the company's fixed assets were 1.004 billion yuan, an increase of 23.84% over the same period last year, and projects under construction were 303 million yuan, a substantial increase of 90.95% over the same period last year. We expect that with the production of new capacity, it will lay a solid foundation for the company's future performance growth.
Cable veteran, sea cable rookie, the future is promising. In March 2023, with its profound technical background, the company won the Shandong Peninsula North BW project, breaking through the order of 220kv high-voltage submarine cable for the first time and entering the field of high value-added submarine cable. According to the company announcement, the company plans to invest in the construction of Fanpingtan submarine cable base project in Jinjing Town, Pingtan Comprehensive Experimental Zone, Fujian Province. the total investment of the project is expected to be 2 billion yuan and the overall construction period is 24 months. The completion of the project base can greatly shorten the maritime transportation time of large-length submarine cables, which can not only save transportation costs, but also fully ensure the progress of the laying project, but also facilitate the maintenance of submarine cables in the future. In addition, Pingtan has a superior location and convenient port transportation, so the construction of a submarine cable production base here is conducive to expanding the submarine cable demand of neighboring provinces and Southeast Asian Belt and Road Initiative countries in the future, and has a broad market prospect.
Due to price pressure, we have lowered the gross profit margin of our sub-business, lowered the company's EPS forecast for 2023-2024 to 1.20,1.69 yuan (the previous value is 1.70,2.46 yuan), and increased the 25-year EPS forecast to 2.33 yuan. Reference comparable company 24-year average 13 times PE, corresponding to the target price of 21.97 yuan, to maintain the "buy" rating.
Risk hint
The newly installed offshore wind power is not up to expectations; the competition in the industry is intensified; the capacity expansion is not up to expectations; the risk of substantial fluctuations in raw material prices; asset and credit impairment risk.