23Q3 revenue was 704 million yuan, an increase of 22.6%, and net profit was 29 million yuan, an increase of 39.7%.
The company's 23Q1-3 revenue was 1,812 million, a year-on-year increase of 12.02%; 23Q1/Q2/Q3 revenue and year-on-year growth rate were 473 million (yoy -0.24%) /634 million (yoy +11.54%) /704 million (yoy +22.61%); 23Q1-3 net profit was 72 million yuan, a decrease of 48.7%; 23Q1/Q2/Q3 net profit and year-on-year growth rate of 23 million (yoy -13.1%) /0.2 billion (yoy -78.1%)/ 29 million (yoy +39.7%); 23Q1-Q3 changes in net profit from net profit and net profit from non-attribution are mainly due to the large year-on-year decline in the price of dyeing fees for main products. The advance payment of Henan Xinye Textile Co., Ltd. may face an unrecoverable risk of making a single bad debt preparation plan, and the decline in net profit; Q3 changes in net profit from net income and net profit deductions are mainly due to increased operating income.
The 23Q1-3 gross profit ratio is 11.6% minus 1.8 pct, net profit margin is 4.0% minus 4.7 pct23q1-3, sales expense ratio is 0.50%, same decrease 0.1 pct; management expense ratio (including R&D expenses rate) is 5.6%, same increase 0.2 pct; financial expense ratio is 0.03%, same increase 0.13 pct.
The warehousing production model improves timeliness, and the comprehensive strength of dyeing and finishing continues to enhance the company's independent Fuchun standard color card with completely independent intellectual property rights, established a standard color database, and transformed the original sample customization model common in the industry into a warehouse-based production model, leading the consumption habits of customers. At the same time, the company adopted a business model of “mainly warehousing production, supplemented by order-based production”. This model can basically guarantee anytime procurement and delivery for major customers, shorten the customer's procurement cycle, improve the customer's inventory and capital turnover ratio, and also promote the company's low-cost, standardized production, and reflect the company's comprehensive dyeing and finishing capabilities.
Resource savings have achieved remarkable results, and cost savings have strengthened advantages
The company now uses a full-biological wastewater treatment process with completely independent intellectual property rights, which has achieved few human factors, low operating costs, and stable emissions within 24 hours. Currently, it is at the leading level in the industry, improving its own R&D level, and has formed a series of competitive technological achievements focusing on dyeing technology, energy saving and emission reduction, and intelligent manufacturing, which has strongly supported the company's rapid and healthy development. Currently, it has 2 50-ton self-contained boilers. The company has stable production and supply in terms of water use and heat, and the cost advantage is obvious.
Adjust profit forecasts to maintain “buy” ratings
The company has specialized in yarn dyeing and finishing business for nearly 20 years. Through continuous investment and innovation, the business scale has been continuously expanded, and product quality and service capabilities have been continuously improved. It has a high level of recognition within the industry and has entered the supplier list of many foreign brands. Taking into account global brand inventory removal, weak consumption recovery, and the company's performance in the past two years (22Q1-Q3 net profit decreased 13.8%, 23Q1-Q3 net profit decreased by 48.7%), we adjusted our profit forecast. The company expects net profit of 1.03/1.81/208 million yuan in 23-25 (previous value was 2.60/3.36/398 million yuan), EPS is 0.69/1.21/1.39 yuan/share, corresponding PE is 23/13/12x, respectively.
Risk warning: risk of insufficient working capital; risk of market competition; risk of fluctuations in raw material prices, etc.