The company released its third quarter report in 2023. In the first three quarters of 2023, the company realized operating income of 5.172 billion yuan,-0.47% year on year, and net profit of 275 million yuan, + 32.83% compared with the same period last year. Among them, the company's single Q3 achieved revenue of 1.828 billion yuan, year-on-year / month-on-month respectively-8.46% / month-on-month 1.17%, return to the mother net profit of 117 million yuan, year-on-year / month-on-month respectively + 31.12% / month-on-month 12.24%.

The downstream demand remained stable from July to August and entered the peak season of the industry in September. September entered the peak season of traditional stock preparation, the operating rate of three-piece cans was further upward compared with Q2, and the profitability of the company's three-piece cans business increased month-on-month under the strategy of reducing costs and increasing efficiency. Q3 comprehensive gross profit margin 12.17%, month-on-month + 8.17pct. The company's main three-piece cans customer, Tenci Red Bull, is expected to add 1.2 billion cans in December. The company plans to invest in the southwest high-end food and beverage packaging production base project for Red Bull supporting cans. Expect follow-up volume to bring growth In terms of two-piece cans, the monthly beer output in China in 7-8-9 was 40.24cm 37.44pm 2.866 billion liters respectively, which was-3.4% and 5.8% respectively compared with the same period last year, mainly due to the influence of high technology and de-storage in the same period. at present, the industry inventory has gradually returned to the normal level, and the profitability of the company's two-piece can business remains stable, and it is expected that the month-on-month improvement will be achieved after short-term revenue pressure.

The rhythm of beer canning is not reduced to open the promotion pattern. According to Taotian in the "2023 Taobao Tmall Beer consumption trend White Paper" revealed that the Chinese beer market continues the canning characteristics, Shang Chao, e-commerce channels and other non-ready-to-drink market consumption increased significantly, mainly to sell canned beer, on the other hand, the impact of beer packaging on consumer decision-making, manufacturers take the initiative to cater to the market to add brand packaging trendy elements, head packaging manufacturers are expected to continue to release income.

Close to the layout of deep ploughing, follow-up volume is expected to be achieved. The company maintains long-term binding cooperation with core customers to provide enterprises in the food, beverage and beer industries with integrated all-round services from research and development, design, printing, production, distribution, filling and information intelligent data services. through the use of "stick" production layout to reduce management costs and transportation costs, with the domestic beverage, high-end upgrading of the winery gradually landed The company is expected to increase its long-term earnings and improve its profits.

Maintain the "highly recommended" investment rating. The company is a leading domestic metal packaging enterprise, with a leading flexible production capacity and a full range of packaging product matrix, through cost reduction and efficiency measures and constantly expand market share, the performance is significantly higher than the industry level. We expect the company to achieve a net profit of 347 million yuan, 398 million yuan and 498 million yuan respectively from 2023 to 2025, an increase of 66%, 15% and 25% respectively over the same period last year. The current stock price corresponds to a 23-year PE of 14.7X, maintaining a "highly recommended" investment rating.

Risk tips: raw material price fluctuations, exchange rate fluctuations, market competition intensified.