Event: The company released its three-quarter report for 2023. 23Q1-3 achieved revenue of 1,593 billion yuan, +32.7%; net profit of 107 million yuan, +83%, gross profit margin of 24.4%, +3.3 pp; net profit ratio of 6.7%, +1.8 pp. Among them, 23Q3 achieved revenue of 629 million yuan, +31.2% year-on-year, +23.2%; net profit of 36 million yuan, +62.2% year-on-month, and -12.8% month-on-month.
Gross margin was stable month-on-month, and exchange earnings declined month-on-month. The global automotive industry has picked up since this year. 23Q1-3 has sold 62.8 million vehicles worldwide, +7.7% (Marklines), and sales of the company's major customers have all increased. Among them, Ford's global sales are +8.7%, GM Global +0.14%, Volkswagen Global +7.2%, Ideal +296%, and NIO +33.4%. The company's revenue has grown rapidly. In addition, benefiting from the return of raw material costs and lower transportation costs, the comprehensive gross margin of 23Q1-3 rebounded sharply. Combined with exchange rate changes in half a year, the exchange earnings generated by half-year exchange rate changes all increased profits. Q3 Affected by the month-on-month decline in exchange rates, net interest rates declined, achieving a gross profit ratio of 24.8%, +6pp, the same month-on-month; the net profit margin was 5.6%, +0.9pp year-on-year, and -2.3pp month-on-month.
The scale of car speakers is growing, and the product structure continues to be enriched. (1) 23H1 sold 32.228 million in-vehicle speakers, +12.8% year-on-year; revenue was 784 million yuan, +32.1% year-on-year. Under the trend of consumer upgrading, the volume and price of car speakers have risen sharply, and the market size continues to expand. The company is the world's leading car speaker. Market share is expected to continue to grow, and domestic substitution continues to advance. (2) With the upgrading of vehicle audio configurations and the increase in the penetration rate of electric vehicles, demand for independent amplifiers and AVAS continues to grow. 23H1's power amplifier sales volume is 143,000 units, +36.5%, revenue is 131 million yuan, +74% year on year; AVAS sales volume was 7887 million units, +45% year on year, revenue of 36 million yuan, +86.9% year on year. The total share increased from 1% in 2017 to 17.3% of 23H1, and the product structure continues to be enriched.
Customers continue to develop, and production capacity is steadily expanding. (1) The company actively explores customer potential and continues to deepen cooperation with existing customers. In the first half of the year, it has received targeted new project letters from many well-known automobile manufacturers, and is expected to achieve batch supply over the next 1-2 years. (2) Production capacity has been steadily expanded. The three production lines of the 23H1 Rusheng Electronics IPO fund-raising project have been completed and accepted, and production capacity and process levels have been improved; the Czech Republic and Mexico have continued to promote automated production line transformation and production line construction for new products; convertible bonds have been listed, and construction of a new plant in Hefei is progressing steadily according to the planned schedule.
Profit forecasts and investment advice. The company's 23-25 EPS is expected to be 0.97/1.40/1.96 yuan, corresponding PE is 47/33/23 times, and net profit CAGR is 53.1%, maintaining the “buy” rating.
Risk warning: risk of raw material price fluctuations; risk of exchange rate fluctuations; risk of industry downturn.