Event: The company disclosed its three-quarter report for 2023. The first three quarters of 2023 achieved revenue of 455 million yuan (yoy +17.36%), net profit margin of 76 million yuan (yoy -11.35%), gross profit margin of 54.53% (yoy+3.13pct), net profit margin of 16.10% (yoy-5.72pct); 2023Q3 achieved revenue of 108 million yuan (yoy -24.52%), net profit margin of 13 million yuan (yoy -58.22%), gross profit margin of 63.51% ( YOY+8.21pct), net profit margin 10.69% (YOY-11.37pct).
Demand for ultrasonic welding of power batteries is slowing, and the cost side is dragging down profit performance 2023Q3, the company's revenue was 108 million yuan, down 24.52% year on year, mainly due to the slowdown in demand for ultrasonic welding equipment in the field of new energy power batteries. The decline in profit was higher than the decline in revenue, mainly due to the sharp rise in management expense ratio and R&D expense ratio. The company's 2023Q3 sales expense rate/management cost rate/R&D cost rate/financial cost rate was 17.23%/12.68%/29.83%/-3.20%, year on year +6.14pc/ + 5.64pct/+13.36pct/- 1.33pct
Leading domestic ultrasonic equipment is promoting the acceleration of domestic substitution. The company is a professional supplier of ultrasonic equipment and automation solutions. It is mainly engaged in R&D, design, production and sales of ultrasonic welding and cutting equipment and accessories, and provides automation solutions in the field of new energy power battery manufacturing. After years of R&D and technology accumulation, the company has built a complete ultrasonic technology platform, which can provide customers in different industries with overall solutions for ultrasonic industrial applications. The company has mastered the design, development and application capabilities of a full range of ultrasonic equipment core components, including ultrasonic power supplies, piezoelectric transducers, acoustic tools, controllers, online monitoring systems, and automation systems. Major foreign-funded enterprises in the industry include Binengxin, Tesotec, and Sonics, while domestic companies include Jiaocheng Ultrasound, Xindongli, and the popularization of science. Among them, Binengxin is a strong foreign-funded enterprise in the industry. It has a series of ultrasonic products used in various fields. Tesotech and Sonics are foreign-funded ultrasonic equipment manufacturers and have a certain market share in the domestic power battery metal welding and cutting equipment field. In the field of ultrasonic welding and cutting, Jiaocheng Ultrasonic is one of the few companies in the domestic ultrasonic equipment industry that can participate in international competition, breaking the situation where the high-end power battery pole ear welding market and a full range of tire ultrasonic cutting equipment are monopolized by foreign investors.
The trend of the composite fluid collector industry is clear, and ultrasonic roller welders are expected to contribute additional volume. Compared with traditional collectors, composite collectors have advantages such as high safety, high specific energy, long life, and low cost. The ultrasonic roller welding machine developed by the company based on ultrasonic high-speed rolling welding system technology replaces traditional copper foil and aluminum foil with composite fluid collection. The lithium battery process will have one more extreme ear transfer welding process using ultrasonic high-speed roll welding technology. The demand for roller welding equipment in a single production line is about 3 times that of extreme ear ultrasonic welding equipment.
Investment suggestions: Considering the company's competitiveness in the field of ultrasonic equipment and clear trends in the composite fluid collection industry, we expect the company's net profit from 2023-2025 to be 1.17/1.67/211 million yuan, respectively, and the corresponding PE is 78x/55x/43x, respectively, maintaining the “recommended” rating.
Risk warning: There is a risk that downstream demand falls short of expectations, and the release of new production capacity is lower than expected