Event: the company released its three-quarter report in 2023, with operating income of 452 million yuan in the first three quarters, an increase of 13.76% over the same period last year, net profit of 1.01 yuan, an increase of 1.24% over the same period last year, deducting non-return net profit of 98.64 million yuan, an increase of 2.99% over the same period last year. Q3 achieved revenue of 164 million yuan, an increase of 13.15% over the same period last year, and its net profit was 29.52 million yuan, an increase of 1.03%.
Our comments are as follows:
Revenue and net profit in the first three quarters increased compared with the same period last year, and the overall gross profit increased by 13.76% in the first three quarters compared with the same period last year. The main reasons are: 1) sales revenue of smart metering business based on ultrasonic gas meter and its modules increased by 634.28% compared with the same period last year; 2) sales revenue of medical and health sensor business based on ultrasonic oxygen sensor increased by 178.06% compared with the same period last year. 3) the sales revenue of the safety monitoring business based on industrial safety and refrigerant leakage increased by 117.46% compared with the same period last year. 4) the sales revenue of the environmental monitoring business based on gas analytical instruments and high-temperature gas sensors increased by 76.99% compared with the same period last year. 5) due to the accumulation of domestic and foreign air purifier market inventory and the slowdown of new demand, the company's air quality sensor business sales revenue decreased by 16.26% year-on-year. The four business areas of the company, namely, smart measurement, medical and health care, safety monitoring and environmental monitoring, are in the stage of rapid development, with a relatively low proportion of business income in all business areas, and a high proportion of the company's air quality sensor business in total business revenue. it has a great impact on the growth rate of business income.
The main reasons why the growth of the company's net profit in the first three quarters is lower than the growth of operating income are as follows: 1) in order to increase investment in research and development of new products, the company's R & D expenses increased by 28.23% compared with the same period last year. 2) in order to strengthen market development, the talent team of the company's marketing system has grown, domestic and foreign advertising, travel expenses and exhibition fees have increased, and the company's sales expenses have increased by 19.96% compared with the same period last year. 3) the company's JIASHAN park was opened and put into production, labor, depreciation and other inputs increased, and the company's management expenses increased by 26.45% compared with the same period last year. 4) due to the decrease in interest income and exchange income from the company's deposit fund-raising account, the absolute value of the company's financial expenses increased by 45.49% over the same period last year. The gross profit margin in the first three quarters increased by 1.02 percentage points compared with the same period last year, but the company increased its investment in product research and development and market expansion, which had a great impact on the growth of net profit.
Ploughing the automobile industry chain and further improving the layout of on-board sensors
Since obtaining IATF16949:2016 Automotive quality Management system Certification in 2017, the company's on-board sensor product line has been further extended, covering a wide range of applications from the initial mid-to-high-end models. 23H1 has added about 7 million on-board sensor projects, and the company's on-board sensor business has expanded from automotive comfort system sensors to in-vehicle air improvement devices, showing a good development trend in fuel vehicles and new energy vehicles. The company's on-board sensor business is mainly composed of automobile comfort system sensors, vehicle air improvement devices, safety system sensors and high temperature gas sensors. 23H1's automotive comfort system-based on-board sensor business continues to maintain good growth; the company's power battery thermal out-of-control monitoring sensors have achieved mass supply; the company's engine emission oxygen sensors continue to achieve mass supply, and product reliability has been recognized by customers. At the same time, facing the target customers such as diesel engine manufacturers and exhaust emission post-processing system manufacturers, the company actively promotes engine emission nitrogen and oxygen sensor products, and has made phased progress. The automobile three high (high temperature, plateau, high cold) test is coming to an end. In addition, based on the technical advantages of the company's sensor core components fan products, the company also extends the development of automotive seat fans in the automotive industry chain, and 23H1 automotive seat fan products have entered a small batch pilot stage.
Profit forecast and investment advice:
As an excellent supplier of gas sensors and analytical instruments, the company's customer structure is relatively stable, and the main customers are well-known enterprises at home and abroad, with a prominent position in the industry; the expansion of the market scale and localization demand of gas sensors and gas analytical instruments provides a good development opportunity for the company. Taking into account factors such as the company's investment in new business and the slowdown in new demand downstream of civil air quality, the company's estimated return net profit for 23-25 is 1.81 million yuan (the original value is RMB 2.06 million), and the corresponding PE is 31x15X, maintaining the "overweight" rating.
Risk tips: the progress of new business is not as expected, the market competition is intensified, the risk of raw material cost fluctuation, etc.