23Q1-3 performance is under pressure due to falling metal prices

Sinorama Technology released three quarterly reports that in 2023, Q1-Q3 realized revenue of 1.999 billion yuan (yoy-25.42%), net profit of-280 million yuan (year-on-year value of 107 million yuan) and deduction of non-net profit of-286 million yuan (year-on-year value of 99 million yuan). Among them, Q3 realized revenue of 733 million yuan (yoy-19.83%,qoq+20.01%) and return to its mother net profit of-63.68 million yuan (year-on-year value of 24.4 million yuan, enlarged month-on-month loss). We maintain the estimated EPS of the company from 2023 to 2025 to be-0.30,0.49,0.64 yuan respectively. Comparable company's 24-year Wind unanimously expected that the average PE is 23 times, taking into account that lithium iron phosphate battery is expected to usher in a replacement cycle in the next few years, the company focuses on lithium iron phosphate battery recovery and recovery capacity continues to improve, as the production capacity is completed and put into production, upstream lithium carbonate prices drive stable, performance is expected to repair and usher in rapid growth, giving the company 31 times PE in 24 years, with a target price of 15.17 yuan (the previous value is 15.86 yuan), maintaining a "holding" rating.

23Q3 realized net profit of-64 million yuan, Q3 realized operating income of 733 million yuan in 23 years, compared with 19.83% and 20.01% of Q3 in 23 years; realized net profit of-64 million yuan, the previous value of 24 million yuan compared with the same period last year, enlarged month-on-month loss; realized non-return net profit of-66 million yuan, year-on-year value of 21 million yuan, and enlarged month-on-month loss. Q3 achieved a gross / net interest rate of 5.35% in 23 years, with a month-on-month change of 8.71% and 7.89/-4.16pct. The month-on-month decline in net interest rate was mainly due to the decline in metal prices and demand, and the company's provision for inventory price decline increased. The 23-year Q3 sales / management / R & D / financial expense rates are 2.76%, 5.08%, 4.35%, 1.36%, respectively, with a month-on-month change-0.56/-0.31/-1.42/-0.03pct.

Lead the drafting of chemical reagent standard revision, electroplating copper additive breakthrough company ploughing chemical reagent field for more than 40 years, in terms of industry standards, the company has been actively promoting the development of international standardization work. In the third quarter, the company took the lead in drafting the national chemical reagent standard revision approved and issued by the State Administration of Market Supervision and Administration, which will be implemented on March 1, 24. In terms of product research and development, Dongshuo Technology, a subsidiary of the company, won a new breakthrough in independent research and development of VCP17 through-hole copper plating in the third quarter. At present, this product has gradually replaced similar foreign products and put into mass production, and its comprehensive ability has been recognized by customers.

Layout of echelon energy storage projects, business development to promote long-term growth

In the third quarter, the company helped the first energy storage project using bus decommissioned battery in the transportation system of Dawan area to be put into operation, which has the advantages of low input cost, long operation cycle, larger charge and discharge volume and so on.

On October 30, it was announced again that Zhengyuan Huachuang and Juneng jointly planned to set up a joint venture company Guanghua Digital Energy Technology Co., Ltd. in Guangzhou, in which Sinorama Technology contributed 9 million yuan with its own capital, with a stake of 18%. The establishment of the joint venture company is conducive to the development and sales of energy storage equipment, the investment, construction and operation of energy storage plants and power stations, and the trade and application promotion of batteries and other equipment, laying a more solid foundation for the future development of the company.

Risk hint: the sales of new energy vehicles are not as expected; the progress of the project is not as expected; the competition in the industry is intensified.