Incidents:
The company released its three-quarter report for 2023. The revenue of 23Q1-3 company decreased 9.8% year on year to 1,916 million yuan, and net profit of the parent company decreased by 47.53% year on year to 84 million yuan. Looking at a single quarter, 23Q3 achieved revenue of 6100 million yuan, -28.79% year-on-year and -7.05%; net profit of the mother was 031 million yuan, -65.76% year-on-year, and +47.44% month-on-month.
Comment:
Affected by factors such as weak recovery in downstream demand and factory relocation, the company's revenue and profit were under pressure in the short term, and profitability improved month-on-month. Against the backdrop of a weak recovery in downstream manufacturing demand and a high 22Q3 base, 23Q3 company revenue declined year-on-year. In terms of profitability, the gross margin of 23Q1-3 companies was -2.53pct to 36.69% yoy, and the net profit margin was -3.16pct to 4.42% yoy. Looking at a single quarter, 23Q3 achieved a gross profit margin of 36.67%, -3.63pct year-on-year, +1.88pct; realized a net profit margin of 5.06%, -5.5pct year-on-year, and +1.83pct month-on-month. The pressure on profitability is mainly affected by factors such as the relocation of factories and the opening of new bases, but it has shown a month-on-month improvement trend.
The year-on-year increase in the company's Q1-3 cost ratio was mainly due to expenses related to factory relocation and the launch of a new production base. The Q3 cost rate improved month-on-month. The 23Q1-3 company's period expense ratio was +1.32 pct to 30.8% year on year. Among them, the sales/management/R&D/finance expense ratio was 8.99%/12.67%/9.22%/-0.08%, respectively, compared to -0.42pct/-0.64pct/+1.39pct/+0.99pct. Looking at a single quarter, the 23Q3 company's expenses rate for the period was 28.97%, +3.11pct, and -0.1pct month-on-month. Among them, the sales/management/R&D/financial expense ratio was 8.69%/11.1%/8.76%/0.42%, year-on-year +0.05pct/-0.89pct/+1.72pct/+2.23pct, month-on-month +0.14pct/-1.77pct/-0.65 pct/+2.18pct. The reduction in the cost rate during the 23Q3 period reflects the company's relocation of factories and the start of new production The cost impact of energy and other factors is gradually decreasing, and it is expected that in the future, the company's expenses will be diluted as the scale of revenue increases.
The hollow cup motor business is expected to further open up the company's profit space. Hollow cup motors have advantages such as high speed, small size, and high torque, and can enable humanoid robots to perform hand movements similar to real humans. The company's DC brushless motors, AC servo motors, and hollow cup motor technology are at the highest level in the world, and is a high-quality supplier of hollow cup motors. In the future, as the industrialization process of humanoid robots continues to advance, the hollow cup motor business is expected to fully benefit, bringing considerable performance flexibility to the company.
Investment rating: The company's net profit from 2023-2025 is estimated to be 260 million yuan, 418 million yuan, and 582 million yuan respectively, corresponding to PE 106x, 66x, and 48x respectively, covering the first time, and giving it an “increase in holdings” rating.
Risk warning: downstream demand falls short of expectations; progress in humanoid robot industrialization falls short of expectations; profit forecasts and valuation failures, etc.