occurrences
The company released its three-quarter report on October 31. The company achieved operating income of 1,613 million yuan in the first three quarters, a year-on-year decrease of 6.27%, and net profit of 286 million yuan, a year-on-year decrease of 45.80%.
reviews
1. Revenue declined slightly, and profit decreased by 45.80% due to factors such as increased expenses. In the first three quarters, the company achieved operating income of 1,613 billion dollars, down 6.27% year on year, and gross margin of 55.16%, up 0.74% from the same period last year, remaining high; the fourth fee rate was 36.18%, up 7.36% year on year. Among them, the management expense ratio and R&D expense ratio increased by 3.78% and 3.46% respectively; the increase in management expenses was mainly due to share payment sharing and employee remuneration increases. Affected by factors such as fee rate increases, the company achieved net profit of 286 million yuan in the first three quarters, a year-on-year decrease of 45.80%, and short-term performance under pressure.
2. Taking on the task of developing two types of complete equipment systems once again, the company's business is expected to be generally skewed towards complete equipment systems in the future. In August of this year, the company and the agency signed a large-scale domestic purchase order, and the downstream expansion of the industrial chain came to fruition. The issuance of this development task notice is new progress made by the company in the overall field of complete equipment systems. The domestic two-type upgrade overall model project has officially started development work, and the company will undertake mass production tasks for this two-type key overall model project. In the future, the company's model project business share will gradually be skewed towards complete equipment systems in general, which will contribute to new revenue and profit growth for the company. We believe that the company's position in the industry as the overall unit of complete equipment systems has been further stabilized. With the continuous mass production of models corresponding to this contract and the final mass production of new models in the future, the company's complete equipment system business will help the company reach a new level of size.
3. Actively carry out overseas business cooperation, and the export prospects of complete equipment systems are broad. In the field of exports, the company has completed the approval of foreign trade export projects for various model system products. Relevant model projects and complete equipment system products have been exhibited at overseas booths one after another, and demand from overseas markets is smoothly connected.
4. The company has completed a fixed target in Geely's “Yizheng Auto” infrared front-loading project, and the automotive infrared front-loading market space is broad. Following the successful application of the company's infrared-assisted driving system in the front-installation project of two major OEMs, Dongfeng Mengshi and GAC Aian, this cooperation has once again completed targeted infrared front-loading projects for domestic commercial vehicles. In the future, mass production will be carried out according to the requirements of the vehicle manufacturer's nodes along with the models. While increasing investment in product development, the company is building a highly automated production line for automotive products to fully prepare for the large-scale release of automotive demand.
5. Employee shareholding shows confidence in long-term development. In 2022, the company implemented an employee stock ownership plan. It began to be unlocked in four stages 12 months from the date the company announced the last target stock transfer to the employee stock ownership plan. The maximum lockdown period was 48 months, and the unlocking ratio was 20%, 20%, 40%, and 20%, respectively. We believe that the employee stock ownership plan can effectively stimulate the enthusiasm of the company's employees, improve operating efficiency, and at the same time demonstrate confidence in the company's long-term development.
6. We expect the company's net profit from 2023-2025 to be 3.96, 5.78, and 815 million yuan respectively, corresponding to the current stock price PE of 85, 59, and 42 times, respectively, maintaining the “buy” rating.
Risk warning
The military's weapons and equipment procurement fell short of expectations; the company lost in the competition for important equipment; the expansion of civilian applications fell short of expectations, etc.