Main points of investment

Revenue N-type technology iteration, the scale of revenue has increased steadily. In the first three quarters of 2023, the company achieved revenue of 1.081 billion yuan, + 92.46% compared with the same period last year, of which Q3 realized revenue of 453 million yuan, + 110.49% compared with the same period last year, mainly due to the transformation of photovoltaic cell technology path from PERC to TOPCON, and downstream battery manufacturers reopened the road of production expansion.

Excluding the impact of share payment, the net profit continues to be repaired. From January to September in 2023, the company confirmed that the impact of share payment fees on net profit was-26 million yuan. excluding the above effects, the company achieved a net profit of 58 million yuan in the first three quarters of 2023, compared with + 5381.81% in the same period last year and 43 million yuan in Q3. Year-on-year + 56.38%, the overall performance level continues to repair.

The gross profit margin has increased and the expenses have been properly controlled. The company's gross profit margin in the first three quarters of 2023 was 22.53%, year-on-year-2.19pct, of which Q3 gross profit margin was 25.31%, + 4.57% year-on-year, mainly due to the increase in gross profit margin of photovoltaic automation equipment. During the first three quarters of 2023, the expense rate was 16.09%, compared with the same period last year-5.68pct, and the sales / management / R & D / financial expense rate was 3.74%, 6.17%, 5.36%, 0.82%, respectively, compared with the same period last year-1.91pct/+1.22pct/-3.01pct/-1.99pct.

Inventory-contract liabilities increased year-on-year, on-hand orders to ensure performance growth. By the end of September 2023, the company's inventory was 592 million yuan, + 15.86% compared with the same period last year, and the contract liability was 240 million yuan, + 2.31% compared with the same period last year. The scale of on-hand orders further increased compared with August, laying the foundation for the company's performance growth.

[investment advice]

The company's performance from January to September in 2023 shows a trend of continuous repair, and we maintain our previous profit forecast: the company's 2023, 2024, and 2025 operating income is estimated to be 1.547 billion yuan / 1.976 billion yuan / 2.25 billion yuan, 98 million yuan / 131 million yuan / 156 million yuan respectively, and EPS is 0.8919 yuan 1.42 yuan respectively. The corresponding PE is 45.34 times of 72.38amp 54.09, respectively, maintaining the "overweight" rating.

[risk Tip]

The acquisition did not go as well as expected

The progress of research and development of copper plating equipment is not as expected.

The progress of downstream photovoltaic production expansion is not as expected.