Key points of investment
In the first three quarters of 2023, the company achieved operating income of 2.195 billion yuan, a year-on-year increase of 20.52%; net profit of 503 million yuan, a year-on-year increase of 25.02%; net profit after deduction of 503 million yuan, an increase of 24.61%; and basic earnings per share of 1.32 yuan, an increase of 17.86% year-on-year.
On a quarterly basis, 2023Q3 achieved revenue of 877 million yuan, a year-on-year increase of 23.11%, a year-on-month increase of 19.15%; net profit of a net profit of 207 million yuan, an increase of 18.14% over the previous year, an increase of 18.41% over the previous year; net profit after deduction of 207 million yuan, an increase of 18.14% over the previous year, an increase of 17.90% over the previous year.
The gross margin for the first three quarters decreased year-on-year, and the net profit margin increased slightly. In the first three quarters of 2023, the company's gross profit margin was 34.52%, down 1.84pct year on year; net profit margin was 22.91%, up 0.82pct year on year; and weighted average return on net assets was 11.49%, down 5.54 pct year on year. 2023Q3, the company's gross profit margin was 33.26%, down 4.41 pct year on year, down 1.47 pct from month on month; net profit margin was 23.62%, down 0.99 pct year on year, down 0.15 pct month on month.
The fee rate for the first three quarters decreased year over year. In the first three quarters of 2023, the company's period expenses totaled 182 million yuan, an increase of 9.30% over the previous year, accounting for 8.29% of total revenue, and a decrease of 0.85pct in revenue.
Cash flow from operating activities improved year over year. In the first three quarters of 2023, the net cash flow from the company's operating activities was -35 million yuan, compared to -176 million yuan for the same period in 2022, an increase of 141 million yuan over the same period in 2022.
Accounts receivable increased significantly from the beginning of the year, and inventory decreased compared to the beginning of the year. As of the end of the third quarter of 2023, the company's accounts receivable were 1,547 billion yuan, up 109.27% from the beginning of the year; notes receivable were 481 million yuan, down 27.46% from the beginning of the year; and the company's inventory was 1.106 billion yuan, down 7.46% from the beginning of the year and 12.73% from the end of the second quarter.
We adjusted our profit forecast based on the latest financial report. We expect the company's net profit from 2023-2025 to be 570/7.42/927 million yuan, EPS of 1.27/1.65/2.06 yuan, respectively, and PE corresponding to the closing price of November 6, 49.1/37.8/30.2 times, maintaining the “increase in holdings” rating.
Risk warning: Downstream demand growth is slowing down; industry competition is intensifying; capacity building falls short of expectations.