Event: Hongya CNC disclosed that the company achieved 2.047 billion yuan in revenue in the first three quarters of 2023, + 28.56% year-on-year, 479 million yuan in net profit, + 24.24% in the same period last year, and 463 million yuan in non-return net profit, + 60.42% in the same period last year. Q3 achieved revenue of 716 million yuan in a single quarter, + 32.09% year-on-year, and net profit of 171 million yuan, + 24.2%, deducting 168 million yuan of non-return net profit, + 63.98% of the same period last year. The performance is in line with expectations and the profit performance is bright.
The growth momentum in the first half of the year mainly comes from the equipment renewal of domestic small and medium-sized furniture enterprises. Since the beginning of this year, as furniture equipment has entered the renewal cycle, the iterative demand of domestic small and medium-sized furniture enterprises for cost-effective numerical control equipment and section intelligent production line has significantly increased. As a leading enterprise, the company has continued to precipitate technology in the past few years. Launch cost-effective digital, intelligent products, seize the downstream update demand, to achieve sustained revenue growth.
The increase in gross profit margin mainly comes from the decline in the cost of raw materials and standard parts and the devaluation of the RMB. The gross profit margin of the first three quarters is 33.23%, compared with the same period last year, the single-quarter gross profit margin of + 1.91 pctjue Q3 is 33.64%, year-on-year + 0.9pct, month-on-month-0.1pct. The reason for the increase is that 1) the cost of raw materials such as steel has decreased; 2) the company has increased the number of suppliers of standard parts, resulting in an increase in relative bargaining power; and 3) overseas revenue is settled in euros and US dollars, and the exchange rate is positive in the first three quarters as a whole.
The decline in the net interest rate was mainly due to the high non-net interest rate deducted from the higher non-net interest rate in the same period last year. The net interest rate in the first three quarters is 23.47%, year-on-year-2.41pct, deducting non-post-net interest rate 22.64%, year-on-year + 4.5pct. Q3 single-quarter net interest rate 23.98%, year-on-year-2.61pct, month-on-month-0.99pct, deducted non-net interest rate 23.46%, year-on-year + 4.64pct. In the same period last year, the company received relocation compensation from Sichuan Danya, so it was not classically high. In the first three quarters, the sales / management / R & D / financial expense rates were-0.55pct/-0.49pct/-1.35pct/-0.64pct, respectively, with a total decline of 3.03pct, while other returns were year-on-year-1.5pct.
Capacity construction: Guangzhou edge sealing machine manufacturing base is expected to be put into use by the end of 2023, Foshan manufacturing base is expected to be put into use in the first half of 2024. With the completion of the new base, the company will improve the self-made proportion of key parts, as well as improve the processing accuracy of key parts, in order to further improve product quality.
Maintain the "highly recommended" investment rating. Hongya benefits from the expansion category + globalization + demand automation upgrade. Over the years, Hongya has focused on the industry and extended horizontally and vertically, and is expected to continue to increase its market share. We expect 23-year revenue to be 2.6 billion, an increase of 21% over the same period last year. The return net profit is 550 million, an increase of 21% compared with the same period last year, and the corresponding PE is only 14 times. Under the background of good policy orientation, it is expected to usher in a double-click of valuation and performance, and maintain strong recommendations!
Risk tips: the demand is lower than expected, the industry competition intensifies, and the risk of overcapacity.