公司发布2023 年三季报，2023 年前三季度公司实现营业收入3.68亿元，同比下降19.81%；归母净利润0.72 亿元，同比下降40.27%；扣非后归母净利润0.67 亿元，同比下降46.62%。Q3 单季度实现营业收入1.24 亿元，同比下降27.56%；归母净利润0.21 亿元，同比下降53.45%；扣非后归母净利润0.18 亿元，同比下降65.04%。Core views
Affected by weak demand for semiconductor equipment components from overseas, the company's revenue showed a downward trend. At the same time, changes in product structure led to a decline in gross margin, compounded by increased pressure on the cost side, and short-term pressure on performance. This capital increase to a wholly-owned subsidiary in Malaysia is expected to increase the company's overseas production and processing capacity, increase its supply capacity to overseas customers in the semiconductor and new energy fields, reduce geopolitical uncertainty, and continue to advance through the combined acquisition of Guanhong Intelligence. We look forward to the subsequent growth of the company's overseas business and transformation into a comprehensive supporting manufacturing service provider.
occurrences
The company released its 2023 three-quarter report. In the first three quarters of 2023, the company achieved operating income of 368 million yuan, a year-on-year decrease of 19.81%; net profit of 72 million yuan, a year-on-year decrease of 40.27%; net profit after deduction of 667 million yuan, a year-on-year decrease of 46.62%. Q3 achieved operating income of 124 million yuan in a single quarter, a year-on-year decrease of 27.56%; net profit of 221 million yuan, a year-on-year decrease of 53.45%; net profit after deducting net profit of 0.18 million yuan, a year-on-year decrease of 65.04%.
Brief review
Revenue showed a downward trend. Reduced gross margin combined with increased expenses put short-term pressure on performance. On the revenue side, due to weak demand for overseas semiconductor equipment components, the 2023Q3 company achieved operating income of 124 million yuan, a year-on-year decrease of 27.56%. From the perspective of profitability, the company achieved gross profit margin and net profit margin in 2023Q3, respectively, of 33.32% and 17.10%, respectively, and -5.53pct and -9.51pct respectively over the previous year. Changes in business structure led to a decline in gross margin, and overall profitability declined significantly. On the cost side, the company's expense ratio for the 2023Q3 period reached 13.01%, year-on-year +13.27pct, of which sales, management, R&D, and financial expenses were 2.31%, 6.82%, 4.30%, and -0.42%, respectively, +0.48pct, +1.75pct, +1.53pct, and +9.50pct, respectively. The increase in financial cost rates was significant. We judge that this was due to the increase in interest expenses and the narrowing of exchange earnings due to the issuance of convertible bonds.
On the profit side, 2023Q3 achieved net profit of 121 million yuan, a year-on-year decrease of 53.45%; net profit after deduction of net profit of 018 million yuan, a year-on-year decrease of 65.04% over the previous year. The decline in gross margin combined with increased cost pressure increased, and overall performance declined significantly. 2023Q3's fair value variable income increased significantly, from -0.08 million yuan in Q3 2022 to 0.06 billion yuan, and its share of net profit from -18.41% to 28.89%, providing some support for the company's performance.
Increase capital in Malaysian wholly-owned subsidiaries, adapt to customer needs, reduce international risks, increase capital in Malaysian subsidiaries, and improve international production and processing capabilities. On October 31, 2023, the company disclosed the “Notice Concerning Capital Increase in Huaya Precision, a Wholly-owned Subsidiary”. It plans to further invest 5.7 million US dollars in Huaya Precision, a wholly-owned subsidiary in Malaysia (invested in batches according to project progress) on top of the previous investment of 4.3 million US dollars, increasing the registered capital to a total of 10 million US dollars. Huaya Precision was founded on June 24, 2021, registered in Penang, Malaysia, and specializes in precision metal structural parts manufacturing. This capital increase is mainly aimed at adapting to the overseas market business needs and market changes of customers in the semiconductor field, new energy and other fields, which is conducive to strengthening Huaya Precision's production and processing capabilities, avoiding or reducing international risks, and enhancing the company's international competitiveness.
The operation of the Malaysian subsidiary has achieved initial results, and the scale of revenue is growing rapidly. According to the capital increase announcement, Huaya Precision Cloud achieved revenue of 3,72225 million yuan in the first three quarters of 2023, and revenue for the full year of 2022 was only 1,7807 million yuan. Revenue for the first three quarters of 2023 has already exceeded twice that of the whole of 2022, and the scale has grown rapidly. We look forward to the performance growth brought about by the release of the Malaysian subsidiary's production capacity, as well as the positive impetus for the expansion of the company's overseas semiconductor and new energy business after the scale increase.
Investment advice
Regardless of the acquisition of 51% of Guanhong Intelligence's shares, the company's 2023-2025 operating income is expected to be 5.04, 7.30, and 1.0 billion yuan, respectively, up -18.68%, 44.96%, and 36.93%, respectively. Net profit from the mother in 2023-2025 was 0.96, 1.41, and 200 million yuan, respectively, up -36.05%, 47.24%, and 41.63%, respectively, corresponding to 2023-2025 PE valuations of 48.57x, 32.99x, and 23.29x , maintaining a “buy” rating.
Risk analysis
1) Downstream production expansion falls short of expectations: If factors such as the downturn in the industry cycle or geopolitics reduce downstream investment and willingness to expand production, it will adversely affect the company's business development and operating performance.
2) New product development and capacity expansion fall short of expectations: If new product development and new project capacity expansion fall short of expectations, it will adversely affect the continued improvement of its future business performance.
3) Technological innovation risk: If the company's new product development cannot be maintained or subsequent R&D investment is insufficient, the company will face the risk of declining market competitiveness.
4) Risk of continued supply chain strain: If the company continues to be affected by supply chain strain, it will adversely affect the company's production capacity and revenue.