Intelligent manufacturing leader maintains "buy" rating

The company is a leading manufacturer of intelligent manufacturing solutions in China, which is expected to continue to benefit from the recovery of downstream boom. AIGC opens up growth space. We maintain the original profit forecast. It is estimated that the net profit of parent company from 2023 to 2025 will be 1.62, 1.97 and 241 million yuan, EPS will be 0.60, 0.73 and 0.90 yuan/share, and the current share price corresponds to PE of 33.2, 27.3 and 22.3 times, maintaining the "Buy" rating.

Event: The company released the third quarterly report of 2023, and the revenue increased steadily. In the first three quarters of 2023, the company realized operating income of RMB 1.414 billion yuan, with a year-on-year growth of 10.60%; the net profit attributable to the parent company was RMB 49 million yuan, with a year-on-year growth of 2.50%. In the third quarter, the company realized operating income of RMB 510 million yuan, with a year-on-year growth of 9.79%; net profit attributable to parent company was RMB 13 million yuan, with a year-on-year decrease of 3.56%. The short-term fluctuation of profit was mainly due to the delay in demand from downstream customers affected by macroeconomic fluctuations, which had a certain impact on the Company's business expansion.

Downstream demand picks up, companies are expected to benefit

According to the National Bureau of Statistics, the PMI of domestic manufacturing industry in September was 50.2%, up 0.5 percentage points month-on-month, returning to the expansion range. With the gradual recovery of downstream boom, the recovery of company performance is worth looking forward to. PMI in all key industries rebounded. Among them, the PMI of equipment manufacturing industry, high-tech manufacturing industry and consumer goods industry in September was 50.6%, 50.1% and 51.3% respectively, up 0.6%, 0.7% and 0.3% year-on-year, all in the expansion range.

The company has accumulated deep advantages in equipment manufacturing and other industries, and is expected to benefit from the downstream boom recovery performance boost.

AI application products quickly landed, AIGC opened up room for growth

The company actively explores the integration and application of AIGC technology. At present, many products have been launched, which is expected to open up long-term growth space. Since 2023, the company has built Chat series products based on Athena Knowledge Center and Data Center, equipped with GPT large model, and enabled by AIGC technology. At present, it has officially launched enterprise knowledge robot ChatFile, enterprise intelligent question answering robot ChatQA, and enterprise digital intelligence consultant ChatBI.

Risk warning: downstream investment is less than expected;AI product landing is less than expected; company research and development is less than expected.