Revenue in the first three quarters increased by about 10% compared with the same period last year, while revenue in the third quarter decreased slightly from the previous quarter. In the first three quarters, the company achieved income of 580 million yuan (YoY + 9.94%), net profit of 60.03 million yuan (YoY-23.89%), and non-return net profit of 40.86 million yuan (YoY-29.77%). Of this total, 3Q23's revenue is 196 million yuan (YoY + 28.64% QoQ-0.77%), the net profit returned to the mother is 11.95 million yuan (YoY-42% Q QoQ-57%), and the non-return net profit is 7.67 million yuan (YoY-40% Q QoQ-65%). In the first three quarters, the company invested 146 million yuan in R & D, an increase of 12.8% over the same period last year, and the R & D fee was 25.09%, increasing 0.6pct over the same period last year.

Gross profit margin decreased in the third quarter, while inventory increased in the third quarter. In terms of profitability, the company's gross profit margin in the first three quarters decreased by 2.8pct to 38.64% compared with the same period last year, and the rate during the period increased by 1.3pct to 32.19% compared with the same period last year, including an increase in R & D fee (0.6pct), a decrease in management fee (0.7pct), an increase in sales fee (0.9pct) and an increase in financial fee (0.5pct). The gross profit margin in the third quarter is 38.07% (YoY-3.4 pctMagi QoQ-0.7pct), and the period rate is 35.59% (YoY + 1.1 pctJet QoQ + 8.7pct). As of the end of September 2023, the company's inventory was 215 million yuan, up from 197 million yuan at the end of June.

The completion of the fixed increase issue will help the company to open up the industrial and new energy vehicle market. According to the company announcement, the company launched in 2022 to issue A shares to specific targets, the number of shares issued is about 17.905 million shares, the issue price is 54.11 yuan per share, the total amount of funds raised is about 969 million yuan, and the net amount of funds raised is about 960 million yuan. This investment project includes 1) new energy vehicle high voltage power supply and electric drive power chip research and development and industrialization project, 2) industrial grade digital power management chip and supporting power chip research and development and industrialization project, 3) Suzhou R & D center project. Through the implementation of the fund-raising project, it will help to promote the level of scientific and technological innovation of the company, in order to open up the industrial and new energy vehicle market. The company expects industrial and automotive revenues to grow to 50% over the next three to five years, up from 20% in 2022.

Investment suggestion: the company's new energy sector expands smoothly and maintains its "buy" rating. We expect the company's 2023-2025 net profit to return to the parent company to be 0.96max, 179pm, 258m, year-on-year growth rate + 6max, 88max, 44%, TEPS, 0.73max, 1.37max, 1.97, corresponding to the stock price on October 30, 2023, the PE is 7640max 28x. The company has completed its additional issuance, expanded smoothly in the field of new energy, and maintained its "buy" rating.

Risk tips: new product research and development is not as expected; customer verification is not as expected; demand is not as expected.