Event description
According to the company's quarterly report for the first three quarters of 2023, the company achieved operating income of 927 million yuan in the first three quarters of 2023, an increase of 1.91% over the same period last year; net profit of 169 million yuan, up 0.24% over the same period last year; and net profit of 132 million yuan, down 15.87% from the same period last year. Basic earnings per share was 0.41 yuan, down 12.77% from the same period last year.
Event comment
2023Q3's revenue, net profit and month-on-month ratio have been improved, cost optimization, product upgrading and other measures have achieved remarkable results. 2023Q3 achieved revenue of 345 million yuan, an increase of 13.82 percent over the same period last year, and a month-on-month increase of 12.45 percent. 2023Q3 achieved a net profit of 63.3883 million yuan, an increase of 14.27 percent and 68.61 percent, respectively. Due to the slowdown of global consumer electronics industry demand in the first half of the year, the market boom of PCB printed circuit board industry continued to decline, and the market competition became increasingly fierce. Q2's revenue and net profit narrowed compared with the same period last year. Relying on cost optimization, product upgrading, new customers and new market expansion and other measures, Q3 company has achieved a small increase in performance on the basis of maintaining a stable operation. If the prosperity of the Q4 PCB industry gradually picks up, the company's performance is expected to usher in faster growth.
Membrane products, CNC tools and other business ushered in rapid growth, the second growth curve development is expected. In terms of membrane products, the company's order for mobile phone anti-peep film was better in the first half of the year. Due to insufficient production capacity, the company accelerated its production expansion plan, and it is expected that Q4 will be able to complete the first round of production expansion. In terms of CNC tools, due to the strong market demand, the company combined with the market environment and its own development needs, the investment structure of the fund-raising project "Precision tool products expansion Project" has been adjusted, and the adjusted project capacity is as follows: milling cutter 7200 million / year (original plan 180 million / year), PCB special knife 8.4 million / year (original plan 6 million / year), CNC cutter 9.6 million / year (original plan 1.8 million / year).
The company has accelerated the layout of overseas markets, and the progress of factory construction in Thailand is in line with expectations. The company plans to start trial production of 2024Q1 with the layout of the Thai factory by purchasing existing plants. The initial monthly production capacity of drilling needles planned by the Thai factory is 300-5 million units, and the monthly production capacity will be gradually expanded to about 10 million units according to the progress of market expansion; the initial monthly production capacity of planned milling cutters will be 500000 units, and the specific expansion schedule will be gradually adjusted according to the orders of overseas customers.
Investment suggestion
It is estimated that the company's revenue from 2023 to 2025 will be 13.79,18.70 and 2.323 billion yuan respectively (the original value is 13.79,18.70 and 2.323 billion yuan), an increase of 13.1%, 35.6% and 24.2% respectively over the same period last year. The net profit was 2.49,3.50 and 449 million yuan (2.50,3.51 and 450 million yuan respectively), up 11.8%, 40.6% and 28.3% respectively. The corresponding EPS is 0.61,0.85,1.10 yuan (the original value is 0.61,0.86,1.10 yuan), and the corresponding PE is 33.7X, 24.0X and 18.7X respectively, calculated with the closing price of 20.46 yuan on October 27. Taking into account the excellent performance of the company's second growth curve and signs of improvement in Q3 performance, the "buy-B" rating is maintained.
Risk hint
The risk that consumer electronics and PCB industries recover less than expected; the risk that technological changes affect the competitiveness of companies; raw material price fluctuations and supply risks; market competition risks; overseas market expansion risks.