According to the announcement, the company achieved 2.411 billion yuan in revenue in the first three quarters of 2023, an increase of 33.65% over the same period last year, 271 million yuan in net profit, an increase of 97.21% over the same period last year, and 200 million yuan in non-return net profit, an increase of 57.11% over the same period last year. Gross profit 28.32%, net profit 12.00%.

23Q3, the company achieved a quarterly income of 1.066 billion yuan, an increase of 23.89% over the same period last year, an increase of 14.13% over the same period last year; a net profit of 121 million yuan per quarter, an increase of 43.15% over the same period last year, a decrease of 12.95%; and a net profit of 125 million yuan per quarter deducted from the same period last year, an increase of 52.21% over the same period last year and an increase of 86.57% over the previous year; gross profit margin was 28.25%, an increase of 1.17pct, and a net profit rate of 11.47%.

With the expansion of the downstream market and the continuous enhancement of competitiveness, the company's 23Q3 revenue and deducted non-net profit reached a new high.

Benefiting from the expansion of the downstream market and the continuous enhancement of the company's competitiveness, the company's 23Q3 revenue and deducted non-net profit have both achieved month-on-month growth and reached a new high. The quarter-on-quarter decline in the company's 23Q3 net interest rate is mainly due to a significant decline in net income from changes in fair value compared with 23Q2 (net income from changes in fair value of 23Q2 is 77 million yuan per quarter, while net income of fair value of 23Q3 is-1 million yuan per quarter). The company's 23Q3 net profit in a single quarter is less than deducting non-net profit because of the impact of non-recurrent profit and loss of about-4.5 million yuan. In the non-recurrent profit and loss, the change in the valuation of the equity investment of Qingdao Juyuan Silver Core Equity Investment Partnership caused about-9 million yuan at the end of the period, and the government subsidy provided a positive impact of about 5 million yuan.

Cash flow became positive compared with the same period last year, and the number of days of inventory turnover decreased compared with the previous year.

In the first three quarters of 23, the company's operating cash flow was about 281 million yuan, a year-on-year increase. The net operating cash flow of the company's 23Q3 decreased month-on-quarter, mainly because the cash outflow of the company's 23Q3 operating activities increased by 204 million yuan due to the purchase of goods / payment of services. In terms of inventory, the company's inventory 23Q3 increased by 439 million yuan month-on-month, but the inventory turnover days decreased by about 42 days compared with 23Q2. In addition, the company's contract debt was 2.188 billion yuan, an increase of 121% over the same period last year, and the sales collection was good.

Sufficient orders on hand will help continue to grow in the future.

In the first three quarters of 23 years, the company signed 5.079 billion yuan in new contracts, an increase of 78% over the same period last year, of which 51% came from the semiconductor industry and 36% from the photovoltaic industry.

The new contract signed by 23Q3 in a single quarter is about 1.491 billion yuan. By the end of 23Q3, the company had contracts of 6.053 billion yuan, an increase of 95% over the same period last year. We believe that the company has sufficient orders on hand, which provides a solid foundation for the company's follow-up growth.

Investment suggestion

We estimate that the company's net profit from 2023 to 2025 will be $764 million at 5069 and 14.14 times for PE, respectively, maintaining the "overweight" rating.

Risk hint

The market demand is lower than the expected risk, the competition aggravates the risk, the raw material purchase risk, the production capacity digestion falls short of the expected risk.