The company released the three-quarter report for 2023: in the first three quarters of 2023, the company achieved revenue of 422 million yuan, an increase of 19.34% over the previous year; realized net profit attributable to shareholders of listed companies of 135 million yuan, an increase of 20.11% over the previous year; net profit after deduction of 128 million yuan, an increase of 25.69% over the previous year.
Comment:
The revenue side was under pressure in 23Q3, and revenue increased month-on-month and declined year-on-year. Among them, the 23Q3 company had revenue of 150 million yuan, -1.80% year-on-year; realized net profit of 41 million yuan, -12.01% of the same period; realized net profit of 39 million yuan, -12.13% of the previous year; and realized net profit deducted from non-return to mother of 39 million yuan, -12.13% year-on-year.
Gross margin declined month-on-month, and incremental business gross margin is expected to recover. Among them, 23Q3 achieved a gross profit margin of 51.25%, -0.87pct year-on-year and -3.06pct; realized a net profit margin of 28.24%, -4.17pct year-on-year, and -4.78 pct month-on-month. Split cost rates. Sales/management/R&D/financial expenses for the first three quarters of 2023 were 1.52%/11.30%/6.76%/-0.85%, respectively, compared to -0.26/+0.50/+0.60/+1.06pct, respectively. The company has maintained a high gross profit margin for a long time, and its products are highly competitive. We expect that with the company's rich product line, the gross margin of incremental business is expected to recover.
The company has R&D technology for the entire industry chain, and cold-forged wire has entered mass production. According to data from Forging World, the total amount of cold forging parts used in ordinary cars abroad is 40-45 kg/vehicle, while the weight of cold forging parts in domestic cars is less than 20 kg/vehicle. The company's forward-looking layout of cold forging technology and innovatively developed liquid sandblasting machines pioneered a new process for acid-free phosphorus removal from the wire surface, breaking through unstable quality of cold heading wires and being vulnerable to environmental protection measures such as discontinuation or production restrictions, etc., improving process stability and reducing production costs.
Ongoing orders are abundant, and performance can be expected. In '23, the company won new project targets for VW Europe, BYD, and Great Wall Motor. At the same time, new projects for VW and MAN in Mexico have been mass-produced, and the company's precision parts for valve transmission units have continued to grow. At the same time, Huzhou's new coordinates have now given many bearing manufacturers such as Renben and Wanxiang, and auto parts companies such as Fuao Co., Ltd. and Huayuan Co., Ltd., stable supply, and active exploration of overseas markets, and the company's performance is promising.
Investment suggestions: The company is speeding up the deployment of the new energy market, continuous expansion of production capacity, and excellent customer structure.
The estimated revenue for 2023-2025 is 61/71/8.2 billion yuan, corresponding to net profit of 1.8/21/240 million yuan. The current market value corresponding to 2023-2025 PE is 16.2/13.8/11.9, maintaining the “buy” rating.
Risk warning: Prices of raw materials are rising, production capacity is falling short of expectations, customer expansion falls short of expectations, and sales of new energy vehicles fall short of expectations.