occurrences
The company released its three-quarter report for 2023. According to the announcement, the company achieved cumulative revenue of 4.106 billion yuan in the first three quarters of 23 years, an increase of 3.85% over the previous year; net profit of 1,142 billion yuan, a decrease of 8.10% over the previous year; net profit after deduction of 878 million yuan, a decrease of 15.76% over the previous year; gross profit margin of 39.78%, net profit margin of 27.85%.
In the 23Q3 quarter, the company achieved revenue of 1,477 billion yuan, a year-on-year increase of 39.30%, a year-on-year increase of 2.54%; a net profit of 411 million yuan, a year-on-year increase of 35.44%, which was basically the same; a net profit of 309 million yuan, a year-on-year increase of 32.44%, a decrease of 6.18% over the previous month; and a gross profit margin of 39.88% and a net profit margin of 27.87%.
MLCC's business progressed smoothly, contributing to a month-on-month increase in the company's revenue
Overall demand in the electronics industry has slowed due to the complex and changing international situation, global macroeconomic fluctuations, and inventory removal by downstream manufacturers. However, the company has taken active measures to develop the product market, accelerate the pace of technological innovation, and continue to optimize and expand the original technology accumulation. MLCCs have made significant progress in the development of high-capacity and small-sized MLCCs. Automotive-grade MLCC products have passed vehicle regulation system certification, and some conventional capacity specifications have also begun to be introduced into the automotive supply chain. Driven by the MLCC business, the company's 23Q3 revenue increased month-on-month in the same quarter. In the future, as the company's operating rate increases and the share of high-capacity products increases, combined with cost advantages, the company's MLCC business is expected to continue to drive overall revenue growth.
Products such as ceramic backboards and PKG are expected to pick up performance as the industry recovers
As the global economy recovers, demand in the downstream consumer market will also continue to improve, driving up the company's revenue from ceramic backplates, PKG and other related businesses. In the ceramic backplate business, the downstream of the company is mainly smartwatches, and revenue is expected to grow as the product's penetration rate in smartwatches increases. In the PKG field, the company's products are mainly used in the field of crystal oscillators. Currently, it is actively expanding downstream applications such as filters, etc., and revenue is expected to increase with the expansion of downstream applications. Furthermore, the company's SOFC project is progressing smoothly.
Investment advice
We expect the company's net profit from 2023 to 2025 to be 1,560/20.80/2,632 billion yuan, respectively, and the corresponding PE is 38.27/28.70/22.67x, maintaining the “buy” rating.
Risk warning
The expansion of new products fell short of expectations, and the recovery in downstream demand fell short of expectations.