Events: The company's revenue for the first three quarters was 2.21 billion yuan, up 5.6% year on year; net profit was 670 million yuan, up 13.6% year on year; net profit after deducting 570 million yuan, up 0.3% year on year. Q3 The company's revenue was 850 million yuan, up 12.6% year on year, up 23.4% month on month; net profit was 290 million yuan, up 31.2% year on year, up 47.1% month on year; net profit after deducting 270 million yuan, up 28.3% year on year, up 89.8% month on month.
The company's Q3 gross margin reached 47.9%, up 2.47 percentage points month-on-month and 6.83 percentage points year-on-year; Q3 net profit margin was 35.2%, up 6.60 percentage points month-on-month, up 4.76 percentage points year-on-year. The company's performance has maintained steady growth mainly due to the company's long-term focus on building high-quality production capacity, improving quality and efficiency, and technological innovation. In terms of building high-quality production capacity, the company has built new production bases in Nantong, Foshan, Europe, Sweden, and Malaysia. Under the same production capacity, the unit investment cost will be further reduced. In terms of improving quality and efficiency, the company's Q3 Nantong fifth-generation super-wet production line contributed production capacity. The company's fifth-generation production line was over 8 meters wide and had a single-line production capacity of 250 million square meters. The single-line production capacity increased by more than 2 times compared to the fourth-generation wet line, which can effectively increase the overall scale effect and reduce production costs. The cost side continued to be optimized. The company's Q3 management expense ratio was 6.22%, down 6.90 percentage points month-on-month, and management expenses were drastically reduced month-on-month.
The company issued restricted stock incentives, demonstrating confidence in rapid performance growth. On October 25, '23, the company announced the 2023 restricted stock incentive plan (draft). The number of restricted shares to be granted incentives is 3.3 million shares, accounting for about 0.26% of the company's total share capital. The price of restricted shares granted for the first time is 7.16 yuan/share. Performance assessment goals: 1) Based on the net profit attributable to shareholders of listed companies in 2023, the growth rate of net profit attributable to shareholders of listed companies in 2024 is not less than 35%. 2) Based on the net profit attributable to shareholders of listed companies in 2023, the growth rate of net profit attributable to shareholders of listed companies in 2025 is not less than 75%. The company issued a restricted stock incentive plan, which will help improve the benefit-sharing mechanism for employees and shareholders and promote the improvement of the company's core competitiveness.
We expect the company to ship 2.8 billion square meters for the full year of '23. Considering the differences in product delivery structure and expectations, we expect the company to return net profit of 10.3 billion, 12.8, and 1.51 billion dollars in 23-25 (23-25 years ago, values of 12.4, 16.3, and 2.01 billion), corresponding to PE valuations of 19.1, 15.4, and 13.0 times. Considering the continuous investment of the company's super cable production capacity, it maintains a “buy” rating.
Risk warning: Competition in the industry is intensifying, and downstream demand falls short of expectations.