Key points of investment
The company released the three-quarter report for 2023: the company achieved operating income of 3.623 billion yuan, a year-on-year increase of 7.69%, completed 73.93% of the annual business plan, a year-on-year decrease of 0.82 pct; realized total profit of 994 million yuan, a year-on-year increase of 25.96%; completed 84.55% of the annual business plan, a year-on-year decrease of 3.85 pct; net profit of 844 million yuan, year-on-year increase of 25.84%; net profit of 801 million yuan per share, year-on-year increase of 22.04%; basic earnings per share of 0.61 yuan/share, year-on-year An increase of 25.73%.
On a quarterly basis, 2023Q3 achieved revenue of 1,210 million yuan, a year-on-year increase of 13.67%, an increase of 4.28%; net profit of 293 million yuan, a year-on-year increase of 50.06%, an increase of 35.07% over the previous year; net profit after deducting non-return net profit of 260 million yuan, an increase of 39.90% over the previous year, an increase of 20.65% over the previous year.
In the first three quarters of 2023, the company's gross profit margin was 37.44%, up 4.46pct year on year; net profit margin was 23.31%, up 3.36 pct year on year. 2023Q3, the company's gross profit margin was 36.95%, up 5.13 pct year on year, up 2.31 pct month on month; net profit margin was 24.21%, up 5.87 pct year on year, up 5.52 pct month on month.
New aviation materials grew steadily, and the machine tool business reduced losses year over year. In the first three quarters of 2023, the company's new aviation materials business achieved revenue of 3,552 billion yuan, an increase of 6.97% over the previous year, completed 73.06% of the annual business plan, a year-on-year decrease of 2.83pct, and achieved net profit of 862 million yuan, an increase of 21.49% over the previous year.
The machine tool equipment business achieved operating income of 43.457 million yuan, an increase of 17.50% over the previous year, completed 46.72% of the annual business plan, an increase of 1248 pct over the previous year; realized net profit of 19729,600 yuan, the same period last year - 29.5899 million yuan, a year-on-year decrease of 9.8603 million yuan.
The cost rate for the period increased year over year, and R&D expenses increased year over year. In the first three quarters of 2023, the company's period expenses totaled 373 million yuan, an increase of 22.50% over the previous year, accounting for 10.29% of total revenue, and a year-on-year increase of 1.24pct in revenue. Among them, R&D expenses were 114 million yuan, up 35.59% year on year, accounting for 3.16% of total revenue, and revenue increased 0.65 pct year over year.
Net cash flow from operating activities improved significantly year over year. In the first three quarters of 2023, the net cash flow from the company's operating activities was 368 million yuan, an increase of 131.88% over the previous year.
Accounts receivable increased significantly compared to the beginning of the year, and inventory decreased. As of the end of the third quarter of 2023, the company's accounts receivable were $3.102 billion, up 82.56% from the beginning of the year; inventory was $1,068 million, down 15.46% from the beginning of the year and 4.17% from the end of the second quarter; and the company's contractual liabilities were $129 million, down 70.28% from the beginning of the year and 39.36% from the end of the second quarter.
We maintain our profit forecast. It is estimated that the company's net profit for 2023-2025 will be 1,019/13.02/1,558 billion yuan, EPS will be 0.73/0.93/1.12 yuan, respectively, and PE corresponding to the closing price of November 6 will be 31.7/24.8/20.7 times, maintaining the “increase in holdings” rating.
Risk warning: Machine tool business losses fell short of expectations; composite business demand fell short of expectations; and pressure to reduce product prices exceeded expectations.