The performance is in line with expectations. The company's operating income in the first three quarters was 4.409 billion yuan, up 21.0% over the same period last year; the net profit returned to the mother was 539 million yuan, up 10.9% from the same period last year; and the net profit from non-return was 567 million yuan, up 18.9% from the same period last year. The operating income in the third quarter was 1.529 billion yuan, an increase of 10.5% over the same period last year, an increase of 1.5% over the same period last year; the net profit returned to the mother was 200 million yuan, up 13.8% from the same period last year and 8.3% from the previous year; and the net profit from non-return was 199 million yuan, up 9.1% from the same period last year and down 13.5% from the previous year.

Gross profit margin improved in the third quarter compared with the same period last year, and cash flow improved significantly. The gross profit margin in the first three quarters was 28.0%, up 0.8% from the same period last year; and 28.2% in the third quarter, up 1.4% from the same period last year, basically unchanged from the previous quarter. The expense rate during the third quarter was 12.6%, an increase of 1.4% year-on-year and 3.3% month-on-month, of which the financial expense rate increased by 1.2% year-on-year and 3.4% month-on-month, which is expected to be mainly due to the decrease in exchange earnings.

The net cash flow of operating activities in the first three quarters was 175 million yuan, an increase of 228.9% over the same period last year, mainly due to the growth of operating income in the current period, the company's continuous strengthening of the control of working capital, and strict control of other expenses.

The convertible bond project is expected to be completed by the end of the year, and the ceiling business will contribute greatly to the company's medium-and long-term growth. The company's 908 million yuan convertible bond project was completed in July, and the funds raised will be used for the construction of the roof base in Mexico and the ceiling products in Zhoushan. The construction of the convertible bond project is being carried out in an orderly manner, and the construction of the plant is expected to be completed by the end of 2023, and revenue is expected to be formally contributed when it is put into production in 2024. According to the prospectus for convertible bonds, the unit prices of the company's ceiling and ceiling system products are 700yuan / set and 4000 yuan / set respectively, which is much higher than the company's existing products; the gross profit margin and net profit rate of the Mexican project are 28.0% and 13.3% respectively; after the Zhoushan project reaches production, the gross profit margin and net profit rate of the Zhoushan project are 28.3% and 15.1% respectively. It is expected that the gross profit margin and net profit rate of the ceiling project are expected to increase the company's existing profit margin. After the Mexican project reaches production, it will add 300,000 sets of roof system integrated products and 600000 sets of automobile roof products per year, and it is expected that the annual sales revenue will increase by 1.62 billion yuan. After the Zhoushan project reaches production, it will increase the annual production capacity of 700000 sets of ceiling products, and it is expected that the annual sales income will increase by 490 million yuan. after the project is put into production, it will contribute greatly to the company's revenue and profit growth. the ceiling business may become the company's main revenue and profit growth pole in the medium and long term.

The volume of new energy in North America opens the ceiling market space, and the supporting share for Tesla, Inc. is expected to increase. The company actively develops the North American market, and the ceiling and ceiling system integration products have been officially designated by A Company, B Company, Ford, General Motors and other customers, and the on-hand order covers nearly 50% of the production capacity of the investment project. and is still working with customers to develop other projects. Under the development trend of global new energy transformation, global well-known vehicle companies such as Tesla, Inc., Rivian, GM and Ford have put forward development strategies and expectations on the electrification trend. North American new energy vehicle market is expected to enter a period of rapid growth, providing a broad development space for the company's ceiling business. In addition, the company has supplied Tesla, Inc. with roof system integration products, followed by the gradual commissioning of the Tesla, Inc. plant in Mexico and the gradual mass production of new models. The company is also expected to deepen bilateral cooperation and continue to obtain the fixed point of Tesla, Inc. 's new model roof project. At the same time, with the volume of ceiling products, the company's product structure will continue to be optimized and module integration, thus consolidating the company's leading position in the global automotive interior parts segment.

After adjusting the income and expense rate, it is predicted that the net profit of the company from 2023 to 2025 will be 8.03,10.31 and 1.315 billion yuan respectively (the original 8.64,10.97 and 1.386 billion yuan). The 23-year average PE valuation of the comparable company will be 32 times, corresponding to the target price of 20.16 yuan, and the buying rating will be maintained.

Risk hint

The sales volume of passenger car industry is lower than expected, the penetration rate of new energy vehicles in North America is lower than expected, the sales of new energy vehicles by Tesla, Inc. and other car companies are lower than expected, and the number of sunshade panels, headrests and ceiling products is lower than expected.