Event: The company released its 2023 three-quarter report. In the first three quarters, the company achieved revenue of 904 million yuan, +12.10% year-on-year, net profit of 84 million yuan, +64.12% year-on-year, net profit of 68 million yuan, +57.31% year-on-year, gross profit margin of 39.45%, and +6.03 pct year-on-year. In 23Q3, the company achieved revenue of 338 million yuan in the single quarter, +35.26% y/y +25.42%, net profit of 35 million yuan, +149.28%, +86.22% month-on-month, net profit of 26 million yuan, +152.96% y/y /82.46%, gross profit margin 41.94%, year-on-year +8.69pct/+2.35pct.
Performance increased sharply, and gross margin reached a record high: the company's 23Q3 revenue in the single quarter increased 35.26% year-on-year, mainly due to the increase in revenue from new energy domestic replacement lasers and intelligent equipment, and the optimization of the product sales structure to strengthen cost control. The gross margin in a single quarter reached 41.94%, a record high since 2019.
On the cost side, the sales, management, R&D, and finance rates for the single quarter in 23Q3 were 8.90%/8.23%/10.50%/-0.10%, respectively, with year-on-year changes of +0.78/+0.26/ -6.25/+3.85 pct, respectively, and the overall total change was -1.36 pct. Revenue, gross profit margin, and expenses all improved markedly year over year, driving a sharp increase in profit year over year. In addition, the total assets/credit impairment accrued by the company in Q3 affected the total consolidated profit for a single quarter (excluding income tax) of about 18.58 million yuan. If added back, the operating profit would be even more impressive.
Looking ahead, module testing+new energy is expected to continue to contribute to growth momentum: 1) Module testing: MR testing actively embraces North American customers, and more testing equipment for second-generation and future product forms is being developed in an orderly manner; camera testing and calibration equipment has been recognized by North American customers, and is expected to grow with customer mass production plans in the future; second-generation VCSEL testing equipment has passed customer acceptance. 2) New energy: A large proportion of lithium battery lasers have achieved import replacement for some customers; a full set of laser equipment for GCL's 100MW perovskite production line was successfully delivered in July. Next generation GW production line equipment is being developed and developed, and is expected to occupy an important position in the industry in the future.
Investment suggestions: The company's performance continues to grow, and downstream module testing and new energy equipment are progressing smoothly. We judge that the company's development momentum is expected to be maintained. We expect the company's net profit for 2023/2024/2025 to be 135/250/379 million yuan, EPS to be 1.42/2.63/3.99 yuan/share, and corresponding PE to be 55.86/30.18/19.88 times, maintaining the “increased holdings” rating.
Risk warning: The progress of industrialization of new products falls short of expected risks; the risk of automobile demand falling short of expectations; the risk of falling consumer electronics demand; exchange rate risk; risk of trade friction; risk of raw material supply and price fluctuations.