incident. The company disclosed the three-quarter report for 2023:1) Revenue for the first three quarters of 23 years was 13.186 billion yuan, +31.86% year-on-year, net profit of 2,32.4 billion yuan, yoy +39.54%, net profit after deduction of 2,283 billion yuan, yoy +40.93%. 2) 23Q3 had quarterly revenue of 6.101 billion yuan, +34.04% year-on-year, net profit of 1,123 billion yuan, +31.71% year-on-year, net profit after deduction of 1,114 billion yuan, +35.07% year-on-year.
Gross margin has remained steady, and net interest rates have increased due to good cost control. The company's gross margin and net profit margin for the first three quarters of 23 years were 38.03% and 17.58%, respectively, with a year-on-year ratio of +2.39/+0.93pct; of these, 23Q3 gross margin and net profit margin were 35.62% and 18.12%, respectively, year-on-year -1.70/-0.62 pct, and -3.31/+0.61pct month-on-month.
The company's cost management and control capabilities have been further enhanced. Sales/management/R&D/financial expenses for the single quarter of 23Q3 were 1.79%/3.97%/6.81%/-1.13% respectively, year-on-year -0.49/-0.97/-0.49pct, and -0.44/-2.22/ -4.18/-1.4pct.
It is expected that overseas business will become a new growth point, and photovoltaic equipment & composite copper foil equipment will open up room for growth. 1) Lithium battery equipment: According to Gaogong Lithium Battery's official WeChat account, in 2022, overseas lithium battery companies will expand production faster, while Chinese lithium battery companies will go overseas faster, driving rapid growth in the domestic lithium battery equipment market. According to the company's 2023 semi-annual report, the company maintains good cooperative relationships with many first-tier lithium battery companies and car companies around the world and has accumulated rich experience in the lithium battery equipment industry. We believe the company is expected to fully benefit from the expansion of overseas lithium battery production. 2) Photovoltaic equipment: According to the company's 2023 semi-annual report, the company has a layout of photovoltaic cell terminal equipment and equipment for photovoltaic modules in the fields of TopCon, XBC, perovskite, etc. According to the company's official WeChat account, recently the company's XBC full process equipment successfully achieved full production at leading customer sites in the industry, receiving customer approval and additional orders. As of September 8, 2023, the company has received more than 2 billion yuan+XBC equipment orders. 3) Composite copper foil equipment: As the composite collector production process gradually matures, the industrial process of composite fluid collector is expected to accelerate. According to the company's interactive and easy response, the company has now launched an innovative manufacturing plan for composite fluid collectors, and related equipment has now received customer orders; in addition, the “magnetron sputtering+water electroplating” innovative solution launched by the company has effectively improved foil yield and equipment utilization, and has received high recognition from customers.
Profit forecasting and valuation. We expect the company to achieve net profit of 35.11/43.18/5033 billion yuan in 2023/2024/2025, and EPS of 2.24/2.76/3.21 yuan/share, respectively. Referring to comparable company valuations, we gave the company 14-16 times PE valuation in 2023, with a reasonable value range of 31.39-35.87 yuan/share (the company's EPS is expected to be 2.24 yuan in 2023), with a reasonable market value range of 492-562 billion yuan, maintaining the “superior to the market” rating.
Risk warning. The expansion of downstream power battery production falls short of expectations, the risk of impairment of accounts receivable, the company's overseas expansion progress falls short of expectations, business development such as photovoltaic equipment & composite copper foil equipment falls short of expectations, and the company's performance falls short of expectations.