Events:
The company released its report for the third quarter of 2023 on October 27, 2023: operating income in the first three quarters was 5.611 billion yuan, up 10.05% over the same period last year; net profit was 549 million yuan, up 6.89% over the same period last year; and net profit after deducting non-return was 506 million yuan, an increase of 4.63% over the same period last year.
Comments:
The performance continued to grow in the third quarter, and the profitability was relatively stable. In a single quarter, the company achieved operating income of 1.902 billion yuan in the third quarter, an increase of 10.52% over the same period last year, a net profit of 169 million yuan, an increase of 10.27% over the same period last year, and a net profit of 150 million yuan, an increase of 7.54% over the same period last year. In terms of profitability, the company's gross profit margin in the first three quarters was 22.48%, down 0.01 percentage points from the same period last year, and the net profit rate was 11.61%, down 0.03 percentage points from the same period last year. According to the production and marketing situation, the production / sales of titanium products in the first three quarters of the company were 24200 tons, down 2.34% and 0.36%, respectively, and the production / sales of other metal products were 896.19 and 832.81 tons respectively, an increase of 57.81% and 39.11% respectively.
Fund-raising projects are progressing steadily and production capacity is expected to increase. The company raised 1.968 billion yuan in a private offering in February 2021 for production capacity construction. the total annual production capacity of titanium and titanium alloy ingots, titanium alloy tubes and titanium alloy profiles will be 10000 tons after the production of high-quality titanium ingots, pipes and profiles. After reaching the production capacity of aerospace wide-width titanium alloy plate, strip and foil production line project, the annual plate production capacity will increase by 1500 tons, strip production capacity will be 5000 tons, and foil production capacity will be 500 tons. According to the company announcement, the above projects will reach the expected state of use in the second half of the year, and with the landing of production capacity expansion, the company's business scale is expected to further improve.
The company has invested heavily in R & D and has obvious technical advantages. The company has strong R & D strength, is a national high-tech enterprise, and has set up a national enterprise technology center, titanium and titanium alloy international science and technology cooperation base, etc. successfully completed a number of major national science and technology projects, 863 projects, national key R & D projects, National Development and Reform Commission marine engineering R & D and industrialization projects. The company's R & D expenditure in the first three quarters was 188 million yuan, an increase of 54.62% over the same period last year.
Investment suggestion: we expect the company's revenue from 2023 to 2025 to be 78.64Comp90.23 / 10.103 billion yuan respectively, and the net profit to be returned to the mother is 7.88pm, 916,036 million yuan respectively, corresponding to EPS 1.65pm 1.92pm 2.17RMB, corresponding to PE18.75/16.13/14.26X, the first coverage will be given a "buy" rating.
Risk hint: capacity expansion is lower than expected, profit forecast and valuation are lower than expected.