The company released its three-quarter report in '23, and net profit grew rapidly. In the first three quarters, the company achieved revenue of 2.203 billion yuan (-6.92% yoy), net profit of 248 million yuan (+79.84% yoy), net profit of 248 million yuan (+79.84% yoy), and deducted non-net profit of 143 million yuan (+37.07% yoy). Among them, Q3 revenue was 938 million yuan (+14.12% yoy), net profit was 98 million yuan (+43.50% yoy), net profit was 98 million yuan (+43.50% yoy), and non-net profit was 96 million yuan (+71.65% yoy).
The product structure has improved, and the level of profitability has increased. The gross margin for the first three quarters was 22.47% (y-o-y +2.96pcts), and Q3 gross margin was 22.21% (y-o-y +0.71 pcts). We expect that the main reason for the increase in gross margin was the company's product structure improvement, which no longer accepts large and low price orders, while benefiting from the benefits of the devaluation of the RMB on exports and the decline in raw material procurement prices. In terms of rates, the sales/management/R&D/finance rates for the first three quarters were 3.08%/5.42%/5.68%/1.35%, respectively, compared with the same period last year
-0.28/+0.23/- 1.68/+2.06pcts Among them, the Q3 sales/management/R&D/finance rates were 2.72%/4.65%/4.07%/0.90%, respectively, compared with the same period last year
-0.36/-0.94/-2.43/+2.63pcts The net interest rate for the first three quarters was 11.13% (y-o-y +5.37pcts), and the Q3 net interest rate was 10.45% (y-o-y +2.14pcts). The increase in net interest rate was mainly due to improved product structure, lower raw material prices, and a sharp increase in non-recurring profit and loss.
The entrance to the large card slot model benefits from the wave of the AI industry. In the field of artificial intelligence, the company has earlier established partnerships with Internet giants Amazon, Ali, Baidu, and Huawei, and Yandex, Russia's largest Internet company, in smart speakers or smart wearable products, and is its mainstream supplier. From 2017 to 2022, the company's cumulative shipment volume to Alibaba was close to 10 million units; the company's cumulative sales volume to Yandex was close to Alibaba, and the average annual shipment volume growth rate was nearly 200%, making it one of the important suppliers in the industry. With a high-quality Internet customer base, the company has accumulated pioneering project experience in artificial intelligence applications, technology research and development, hardware design, precision manufacturing, etc., and can provide integrated solutions quickly and efficiently. It has a certain first-mover advantage and a good reputation in the industry, which helps the company to gain momentum in the field of artificial intelligence hardware in the future and further increase its market share.
[Investment advice]
In the context of the rapid development of the artificial intelligence industry, the company's performance is expected to continue to grow. We expect the company's revenue for 2023-2025 to be 27.48/28.65/3.188 billion yuan respectively, net profit of 3.02/3.03/338 million yuan, corresponding EPS of 0.17/0.17/0.19 yuan, respectively, and PE of 30.05/29.96/26.89 times for 2023-2025. Give it an “Overweight” rating.
[Risk Reminder]
Sales of the company's hardware products fell short of expectations;
The development of the artificial intelligence industry fell short of expectations.