The company achieved revenue of 700 million yuan in the third quarter, a year-on-year increase of 9%, net profit of 100 million yuan, net profit of 100 million yuan, and net profit of non-attributable net profit of 104 million yuan, resulting in a single quarter turning a loss into a profit; the gross profit margin for the third quarter was 20.24%, an increase of 5.22 pct over the second quarter, a significant increase over the previous quarter. The company achieved operating income of 1.77 billion yuan in the first three quarters, a year-on-year increase of 7%, net profit of 65 million yuan, net profit of net income of 65 million yuan, and net profit of non-net income of 60 million yuan. From the beginning of the year to the end of the third quarter, the company actively removed inventory, reduced procurement, and vigorously returned accounts receivable. The net cash flow from operating activities reached 870 million yuan.
Smartphone CIS covers the mainstream needs of the market and enters the 50 megapixel high-end market. In the field of consumer electronics, through the company's continuous R&D and innovation, smartphone CIS products cover the current mainstream market demand, with product resolutions ranging from 800,000 pixels to 50 million pixels. The company has launched two high-end CIS products for the 50 megapixel product circuit. The SC550XS, which focuses on the high-end flagship main camera market, was mass-produced and shipped in the first half of '23, and another high-end product, the SC520XS, has also entered small-scale mass production. The company's newly launched 13 megapixel mobile phone CIS product SC1320CS is also expected to be mass-produced in the fourth quarter.
The certification of automotive electronic products went smoothly, and the automotive CIS has been mass-produced. The company has passed the three ASILD industry standard system certifications for automotive functional safety processes, and established and perfected automotive-grade chip R&D and quality management systems. Automotive CIS products have been mass-produced by customers such as BYD, FAW, SAIC, Dongfeng Nissan, and Great Wall. Aiming at the field of autonomous driving, the company's new 8 megapixel automotive-grade image sensor product is already in the sample testing stage. The company will continue to focus on the three major application scenarios of in-vehicle imaging, sensing, and cabin, and continue to launch and further enrich the ATSeries series product matrix.
Accelerate the deployment of smart security and continue to enrich the product matrix. The company continues to advance in the high-end field of intelligent security, creating a portfolio of cutting-edge security products such as the Pro Series full performance upgrade series, AI Series advanced imaging series, and SL Series super starlight series. The company launched three AI series image sensors to improve the performance of intelligent security applications, and is expected to achieve mass production in the first quarter of 2024. In addition, the company has launched a 5MP high-resolution image sensor to enable high-end industrial machine vision camera applications, and is expected to be mass-produced in the fourth quarter.
We forecast the company's earnings per share for 23-25 to be 0.07, 0.64, and 1.22 yuan respectively (the original 23-24 forecast was 1.22 and 1.62 yuan, mainly reducing the revenue growth rate and gross profit margin). Based on the 25-year average PE valuation level of comparable companies, 46 times the PE valuation level, corresponding to the target price of 56.12 yuan, we gave an increase in holdings rating.
Risk warning
Industry recovery falls short of expectations, new product progress falls short of expectations, risk of inventory impairment, and risk of fluctuations in gross margin.