2023Q3 performance exceeded expectations, energy storage and temperature control business continued to expand

In 2023, Q1-Q3, the company's revenue was 1,327 billion yuan, up 98.02% year on year, and net profit was 141 million yuan, up 64.05% year on year. 2023Q3's revenue was 621 million yuan, up 131.49% year on year, and net profit was 74 million yuan, up 96.41% year on year. The company's Q3 performance maintained rapid growth, mainly due to the continued expansion of demand in the company's downstream energy storage, electronic and electrical industries. Considering the continued expansion of energy storage temperature control, we raised the company's profit forecast for 2023-2025. The estimated net profit for 2023-2025 is 2.19/3.34/491 million yuan (previous value is 2.07/3.07/490 million yuan), earnings per share are 1.30/1.98/2.91 yuan, and the current stock price corresponding to PE is 34.7/22.7/15.5 times. The company is a leader in temperature control in the domestic industry and maintains a “buy” rating.

Accelerate the layout of energy storage and temperature control business and continue to benefit from the rapid development of the industry. With years of technology accumulation, strong R&D strength and large production capacity scale, it has an annual production scale of 120,000 sets of liquid cooling temperature control products and 200,000 sets of air cooling temperature control products. At the same time, it has increased the layout of new energy temperature control products, built a new 58,000 square meter energy storage and heat management system project area, and rapidly promoted energy storage temperature control business. As the energy storage industry continues to grow rapidly and continuously, the company will continue to benefit.

Increase equity incentives to guarantee performance growth

On August 22, 2023, the company adjusted the first restricted stock incentive plan, adjusting the number of restricted shares granted for the first time from 716,000 shares to 1,288,800 shares, the number of reserved restricted shares from 186,000 shares to 334,800 shares, and the initial and reserved grant price from 63.80 yuan/share to 35.00 yuan/share. On September 14, 2023, the company reviewed and approved the second restricted stock incentive plan (draft). The first grant date was October 9, 2023, and 2,665 million restricted shares were granted to 144 eligible incentive recipients at a price of 25.60 yuan/share. In recent years, the company has continuously developed businesses in the fields of energy storage temperature control and industrial temperature control. By increasing equity incentives, the company is expected to fully mobilize the enthusiasm and creativity of core employees, enhance the team's internal cohesion, and lay a solid foundation for rapid future business expansion.

Risk warning: the energy storage business expansion falls short of expectations; the development of the energy storage industry falls short of expectations; and the development of the data center industry falls short of expectations.