The company disclosed its three-quarter report for 2023. 2023Q1-Q3 achieved revenue of 2,047 billion yuan, yoy -14.41%, net profit of 301 million yuan, yoy +6.80%, non-return net profit of 291 million yuan, yoy -2.42%, gross profit margin of 57.42%, yoy+11.35pct, net profit ratio of 14.96%, yoy+3.18pct; 2023Q3, achieved revenue of 730 million yuan, yoy -28.46%, net profit of 106 million yuan, yoy -17.43%, net profit of non-return to mother 108 million yuan, yoy -12.71%, gross profit margin 57.47%, yoy+14.20pct, net profit margin 14.87%, yoy+2.16pct.

Q3 results fell short of expectations due to few confirmations in the new energy business for the current quarter. 2023Q3, the company's revenue fell 28.46% year on year, and net profit fell 17.43% year on year, which is lower than expected. We expect it to be related to the following points: ① The company's new energy business has not yet reached the point of revenue confirmation. The revenue volume of this business is large. The company's inventory at the end of 2023Q3 increased by 45 million yuan to 831 million yuan, and contract debt increased by 11 million yuan to 117 million yuan. It is expected to be related to the increase in new energy business volume; ② The company's professional lighting business is affected by weakening domestic demand and increased competitive pressure; ③ explosion-proof business is affected by weakening domestic demand and increased competitive pressure; explosion-proof business Due to the impact of investment in security intelligence team building, we expect a certain increase in expenses over the same period last year.

Equity incentives have been introduced once again to bind the interests of core management. In September, the company launched a new round of equity incentives. The number of restricted shares to be granted under this incentive plan is 6.655 million shares, accounting for about 1.97% of the total share capital; the number of incentive recipients to be granted under this incentive plan is 220 people, accounting for 9.95% of the total number of employees, including 3 deputy general managers, 1 director, and 216 middle management and technical personnel. Prescribe unlocking conditions:

① The first type of incentive unlocking conditions: the company's net profit in 2023 is not less than 389 million yuan, the company's cumulative net profit in 2023-2024 is not less than 797 million yuan, and the cumulative net profit of the company in 2023-2025 is not less than 1,226 billion yuan; ② The second type of incentive unlocking conditions: the operating income of the Southwest Area of the Ang Intelligent Business in 2023 is not less than 10 million yuan, and the cumulative operating income of the Southwest Area of the Ang Intelligence Business in 2023-2025 is not less than 47 million yuan, 2023-2025 The cumulative revenue of the Southwest region is not less than 10,000 million yuan.

The safety engineering intelligent system is progressing steadily and has been recognized by customers. The company set up a project in 2018 and launched in 2019. The “Safety Engineering Intelligent Control Platform” tailored for the traditional petrochemical industry includes hazardous source risk detection and early warning, dual prevention mechanisms, special operation process informatization management, personnel location management, intelligent video surveillance, production safety full factor management information, intelligent lighting, energy management and other modules. Following major system upgrades in the hazardous chemical field, the “Safety Engineering Intelligent Control Platform” with new functions recently operated steadily in many enterprise platform projects constructed by our company, and with the emergency management department where the user is located The platform was successfully connected, and the operational effectiveness evaluations were all “excellent”.

Investment suggestions: Considering that the company's new energy business and other developments are slightly lower than expected, we expect the company's net profit from 2023-2025 to be 4.22/5.26/647 million yuan respectively, and the corresponding PE is 14x/11x/9x respectively, maintaining the “recommended” rating.

Risk warning: The risk of downstream demand slowing, and the risk of fluctuations in raw material prices.