The company released the “Report for the Third Quarter of 2023”, during which it achieved operating income of 2.195 billion yuan, an increase of 20.52% over the previous year; realized net profit of 503 million yuan, an increase of 25.02% over the previous year; and achieved net profit of 503 million dollars, an increase of 24.61% over the previous year

The performance of the first three quarters increased rapidly, and net interest rates increased. The company achieved operating income in the first three quarters ($2.195 million, +20.52% year-on-year), mainly due to increased market orders and revenue growth; realized net profit ($503 million, +25.02% year-on-year), which was mainly due to revenue growth, gross profit increased by 95.587 million yuan, and on the other hand, the company's public stock financing in July and increased interest income over the same period; net profit withheld from equity was realized ($503 million, +24.61% year over year). Looking at a single quarter, the company achieved revenue in 23Q3 (877 million, +23.11% year-on-year) and net profit (207 million, +18.14% year-on-year).

In terms of profitability, the company's gross profit margin on sales was 34.52%, down 1.83pct from the same period last year. In terms of period expenses, the company incurred sales expenses during the period (RMB 108.931 million, +25.30% year-on-year); management expenses (RMB 565.2004 million, +22.21% year-on-year); and financial expenses (-36 million yuan, compared with -021 million yuan in the same period last year). The three fee rates were 1.42%, down 0.42pct from the same period last year. The company's R&D expenses (151 million yuan, +13.46% year-on-year) are mainly due to the company's continuous enhancement of enterprise innovation vitality and increased R&D investment; taxes and surcharges are (10.9915 million yuan, +396.35% year-on-year). The company's net profit margin on sales in the first three quarters was 22.91%, up 0.82pct from the same period last year.

Raise capital to ease production capacity constraints, and asset injection plans help the company develop. In terms of balance sheets, fixed assets at the end of the reporting period were 210 million yuan, up 26.89% from the beginning of the year. According to the company's prospectus, the scope of capital raised and invested in the company's IPO covers the company's four major business sectors. The core is to ease the tight production capacity of the major businesses and secure advance volume for future downstream demand growth. It is expected that with the completion of the company's fund-raising projects, the company's revenue and profitability will continue to increase. Furthermore, according to the prospectus, the injection plan of Zhenjiang Titanium Alloy Company managed by the company is clear. It currently undertakes the pre-stage and post-stage processes for titanium alloy castings, and will further increase the production capacity and processing capacity of titanium alloy castings after future injection to help the company continue to develop.

Profit forecast: The company's net profit for 2023/2024/2025 is estimated to be 555/7.52/998 million yuan, corresponding valuations of 50, 37, and 28 times, maintaining a “highly recommended” rating.

Risk warning: The pace of production expansion falls short of expectations, and orders fall short of expectations.