Events: The company released its three-quarter report for 2023. The first three quarters achieved revenue of 1.33 billion yuan, +24.4% year-on-year; realized net profit of 150 million yuan, -9.8%; and realized net profit of 130 million yuan, -8.9% year-on-year. Looking at the spin-off, Q3 revenue was 5.1 billion yuan, +41.5% year-on-year and +14.3% month-on-month, a record high for a single quarter; Q3 net profit was 0.6 billion yuan, +25.5%, +31.9% month-on-month; Q3 net profit deducted from the parent was 500 million yuan, +21.3% year-on-year, +38.3% month-on-month.
The commercial vehicle market is recovering, and the revenue growth rate has increased markedly. The commercial vehicle industry maintained a recovery trend in 2023. In January-September, the domestic commercial vehicle market sold a total of 2.939 million vehicles, a cumulative year-on-year increase of +18%. Benefiting from the boom in the commercial vehicle market, 2023Q1-Q3 had revenue of 1.33 billion yuan, +24.4% year-on-year. The parent company (mainly engaged in commercial vehicles) achieved revenue of 240 million yuan, an increase of 57.5% over the previous year, higher than the company's overall business revenue growth rate.
Profitability improved month-on-month. The gross profit margin of the Q3 company was 29.7%, -2.4pp year on year and +0.3 pp month-on-month. It is estimated that the month-on-month increase in gross margin mainly benefited from increased capacity utilization. In terms of cost ratio, Q3 sales expense rate/management expense rate/R&D expense rate/financial expense ratio were 1.1%/4.7%/4.4%/4.1%, year-on-year changes of -0.1 pp/-1.1 pp/-2.4 pp/+0.8 pp, respectively, and -0.2 pp/-1.3 pp/-1.2 pp/+0.1 pp, respectively. Overall, the net interest rate of Q3 companies was 11.8%, -2.0pp year-on-year and +1.6pp month-on-month.
The number of differentials is expected to continue to rise, and the aviation business continues to advance. According to the 2023 interim report, the company's differentials are progressing smoothly. The company has carried out many collaborations with customers such as BYD, Dana, Geely, Great Wall, NIO, and Ideal. Some products have already been mass-produced. In the future, it is expected that they will benefit from the volume of customers such as BYD, Dana, and Ideal, and differential revenue is expected to continue to rise. Furthermore, the company stated on the investor interactive platform in November that the company's products are equipped with Celis and Chery related models through tier 1, and the customer structure has been continuously optimized. Recently, the company stated that the aviation parts R&D and manufacturing project in the Xindu Aviation Industrial Park has formed related production capacity. Currently, Haoneng Aerospace and Aerospace Shenkun are mainly cooperating on components such as aerospace valve sleeves, valve cores, pistons, covers, and brackets to help the company grow its medium- to long-term performance. The company has a forward-looking layout in the field of reducers, and its subsidiary Chongqing Haoneng has invested in the construction of a precision planetary reducer project. Related products have already been exchanged and discussed with potential robot customers. In the context of national policies encouraging and supporting the development of the humanoid robot industry, it is expected that the reducer business will become an important growth point for the company's performance.
Profit forecasts and investment advice. The company's 2023-2025 EPS is expected to be 0.56/0.72/0.95 yuan, and net profit for three years will grow at a compound annual rate of 20.7%, maintaining the “buy” rating.
Risk warning: the risk of fluctuations in raw material prices, the risk of a sharp decline in profit margins due to price cuts by OEMs, and the risk that the progress of new business falls short of expectations.