The company announced its 2023 three-quarter report. In the first three quarters of 2023, the company achieved operating income of 904 million yuan, an increase of 12.10% over the previous year, net profit of 84 million yuan, an increase of 64.12% over the previous year; in the third quarter, it achieved operating income of 338 million yuan, an increase of 35.26% over the previous year, and realized net profit of 35 million yuan, an increase of 149.28% over the previous year. As a leading domestic MOPA laser company, the company has continued to expand the application of intelligent laser devices in the fields of lithium batteries, photovoltaics, consumer electronics, etc. in recent years. In the future, as the company gradually clears up its loss-making business, its profitability is expected to continue to improve and continue to maintain its buying rating.
Key points to support ratings
Orders in the lithium battery sector are gradually being placed, and the company's performance is growing steadily. As revenue from domestic replacement laser products and intelligent equipment products in the field of new energy lithium batteries increased, the company's performance grew steadily. In the first three quarters, the company achieved revenue of 904 million yuan, an increase of 12.10% over the previous year, and realized net profit of 84 million yuan, an increase of 64.12% over the previous year; in the third quarter, it achieved operating income of 338 million yuan, an increase of 35.26% over the previous year, and net profit of 35 million yuan, an increase of 149.28% over the previous year.
Loss-making businesses were gradually cleared, and product structure improvements helped improve the company's profitability. As the company gradually shrinks its sheet metal cutting business with low gross margin, the company's sales product structure continues to be optimized, and profitability continues to improve. The gross margin for both the first three quarters and the single third quarter reached a new high since listing. The company's overall gross margin for the first three quarters was 39.45%, up 6.03pct year on year, net profit margin was 9.24%, up 2.98 pct year on year; overall gross margin for the third quarter was 41.94%, up 8.69pct year on year, up 2.35 pct month on month, net profit margin was 10.31%, up 4.80 pct year on year, up 3.48 pct month on month.
Continuously expand applications in new fields, and lithium batteries, photovoltaics, and consumer electronics provide growth impetus. As a leading domestic MOPA laser company, the company continues to explore the application of lasers in various fields. In the lithium battery field, products developed by the company, such as lasers with adjustable annular light spots and monitoring modules before, middle, and post-welding, have continuously received technical recognition from customers; in the photovoltaic field, for photovoltaic perovskite, the company can provide laser intelligent equipment for high-precision thin-film battery marking, and cooperate with GCL Optoelectronics to build the first 100MW perovskite photovoltaic cell mass production line; in the consumer electronics field, the company has maintained long-term close communication with leading customers in the industry, and developed more equipment for its MR optical module optical inspection in 2022. In the first half of 2023, the company assisted customers in developing their second-generation MR products. With the subsequent launch of this product, the company is expected to fully benefit from the release of demand.
valuations
Considering that the company's downstream demand for lithium batteries, consumer electronics and other fields is being impacted by global economic development, we have adjusted the company's profit forecast to achieve operating income of 13.88/17.49/2,262 billion yuan in 2023-2025, net profit of 1.32/2.09/331 million yuan, corresponding PE of 60.2/38.1/24.1 times, but considering that the company's expansion in the fields of lithium batteries, photovoltaics, and consumer electronics is already beginning to bear fruit. Profitability is expected to continue to improve in the future as the company's loss-making business gradually comes out. Maintain the buy rating.
The main risks faced by ratings
Downstream demand falls short of expectations; risk of a sharp rise in raw material prices; risk of new product promotion falling short of expectations.