Issue a plan to increase holdings to demonstrate confidence in long-term development. According to the announcement issued by the company on October 30, Mr. Wang Yanqing, the actual controller, chairman and general manager, plans to increase his holdings of the company within 6 months from the date of the announcement, with the proposed increase of no less than RMB 150 million and no more than RMB 300 million. the funds needed to increase holdings are self-owned or self-raised funds. This increase plan does not set the price range of shares, but will be implemented according to the fluctuation of the company's stock price and the overall trend of the capital market. As of the announcement date, the total proportion of shares held by Mr. Wang Yanqing and the enterprises under his control is 31.95%. This increase plan demonstrates its recognition of the long-term investment value of the company in the future, and aims to promote the sustained, healthy and stable development of the company.

In the first three quarters, the performance increased steadily and the profitability improved. In the first three quarters of 2023, the company achieved operating income of 13.186 billion yuan, an increase of 31.86% over the same period last year, and a net profit of 2.324 billion yuan, an increase of 39.54% over the same period last year. 2023Q3, the company achieved an operating income of 6.101 billion yuan, an increase of 34.04% over the same period last year, and a net profit of 1.123 billion yuan, an increase of 31.71% over the same period last year.

From January to September 2023, the company's comprehensive gross profit margin rose 2.38 percentage points year-on-year to 38.03%, and net profit margin rose 0.93 percentage points year-on-year to 17.58%. From January to September 2023, the company's expense rate rose 0.47 percentage points year-on-year to 16.30%. Among them, the sales expense rate decreased by 0.52 percentage points to 1.90% compared with the same period last year, and the management / R & D / financial expense rate increased by 0.21%, 0.56% and 0.22% to 5.28%, 9.55% and-0.44% respectively.

Continuous innovation to consolidate competitive advantage, on-hand orders are relatively sufficient. In the first three quarters of 2023, the company's R & D expenses increased by 40.02% to 1.26 billion yuan compared with the same period last year, a record high in the same period. As a global leader in high-end lithium battery intelligent equipment and overall solutions, the company has continued to increase its R & D investment in recent years, and many products can meet the needs of mainstream customers at home and abroad in terms of performance. by virtue of technological advantages and global well-known brands to establish a good in-depth cooperation relationship. By the end of the third quarter of 2023, the company's contract liabilities increased by 21.14% year-on-year to 9.905 billion yuan, and inventory increased by 23.78% to 13.375 billion yuan, indicating that orders-on-hand are relatively sufficient, supporting the company's future performance growth.

The penetration rate of new energy vehicles has further increased, and the lithium equipment industry continues to benefit. According to the China Automobile Association, from January to September 2023, the production and sales of new energy vehicles in China increased by 33.7%, 37.5% to 631.3 and 6.278 million respectively compared with the same period last year, and the permeability rose 6.3 percentage points to 29.8%. The steady growth of the new energy vehicle market has driven the demand for power batteries. According to the China Automotive Power Battery Industry Innovation Alliance, the number of power batteries installed in China increased by 32.0% in the first three quarters of 2023 compared with the same period last year to 255.7GWh. Although the growth rate of production and sales of new energy vehicles in China has slowed down since 2023 due to the influence of high base and intensified market competition, based on the continuous optimization of industrial layout and the improvement of supporting infrastructure, in the future, the development potential of China's new energy vehicle industry is expected to be further released, and the continuous growth of power battery demand is good for the development of lithium electric equipment industry. With the introduction of policies to support the development of new energy vehicles in Europe and the United States, the localization trend of new energy vehicles and lithium electricity industry has accelerated, and domestic battery enterprises have made more efforts to invest and build factories overseas. in recent years, the company's R & D and innovation, talent echelon, local services are constantly promoted to internationalization, and are expected to benefit from the growth of demand in overseas markets in the future.

Profit forecast and investment rating: the company's EPS from 2023 to 2025 is expected to be 2.28,3.01,3.64 yuan respectively. Based on the closing price of 27.99 yuan per share on October 31, the corresponding dynamic PE is 12.28,9.30,7.69 times respectively, maintaining the company's "recommended" investment rating.

Risk hints: intensified market competition leads to the company's performance falling short of expectations; unfavorable factors lead to the risk that the implementation of the increase plan is delayed or unable to be implemented; the market risk caused by the further deterioration of Sino-US comprehensive relations; the risk of adjustment of monetary policy and industry policy; the potential recession in the United States and Europe leads to the risk that exports fall short of expectations. The domestic economic recovery is lower than expected, the global geo-conflict intensifies, the risks caused by other black swan events, and the systemic risks of domestic and foreign secondary markets.