The company released the report for the third quarter of 2023: in the first three quarters of 2023, the company achieved operating income of 1,152 million yuan, a year-on-year increase of 17.1%, a year-on-year increase of 145 million yuan, a year-on-year increase of 53.9%, and a net profit of 132 million yuan, a year-on-year increase of 64.1%; in the third quarter of 2023, the company achieved revenue of 440 million yuan, an increase of 21.1% year-on-year, and realized net profit of 0.61 million yuan, a year-on-year increase of 32.6 million yuan; %
Profitability has improved, and there is still room for improvement in the future. The company achieved a gross profit margin of 23.9% in the third quarter of 2023, a month-on-month increase of 2.0pcts, a year-on-year increase of 5.2pcts, a year-on-year increase of 13.8%, a year-on-year increase of 1.5pcts, a year-on-year increase of 0.8pcts, a year-on-year increase of 0.8pcts, a year-on-year increase of 7.2pcts, a net profit margin of 12.6%, a year-on-year increase of 3.0pcts, and continuous improvement in profitability, mainly due to a sharp decline in raw material prices and relative product prices Stable. In the future, as product sales increase, the scale effect will become more and more significant. As superimposed companies have new product connectivity cables, there is still room for improvement in the company's profitability.
Production capacity is progressing steadily, and sales volume continues to grow. The company's 2023 semi-annual report revealed that the company's production capacity of products is about 300,000 units per day. With the gradual increase in production capacity in Vietnam, the company's annual production capacity is expected to reach 150 million units. On the customer side, in addition to traditional leading companies such as Longji, Tianhe, and Jingao, the company continues to expand new partners, such as new forces such as Tongwei Co., Ltd., and the expansion of production capacity and the introduction of new customers to support the company's future sales growth.
The gradual release of interconnect cables will become the company's second growth curve. The application of connected wiring harnesses can reduce the use of confluence boxes and labor costs, and is mainly used in photovoltaic projects with high labor costs overseas. The company has continued to receive new orders since 2023. In the future, it will benefit from patent protection and incremental demand from US ground power plants. The company's interconnect wiring business is expected to expand; compared with the junction box business, the profitability of connected wiring is stronger, and the company's profit is expected to increase significantly in the future, and it is expected to grow into the company's second growth curve.
Investment suggestions: Considering the adjustment of the company's product structure and the adjustment of shipping targets, we lowered the company's predicted operating income for 2023-2024 to 16.2/2.28 billion yuan (previous value: 25.7/3.16 billion yuan), with an estimated operating income of 2.92 billion yuan in 2025; net profit of the mother in 2023-2024 was lowered to 23/3.1 billion yuan (previous value of 31/5.0 billion yuan), which is expected to achieve net profit of 380 million yuan in 2025; 2023-2025 based on current total share capital Diluted EPS 1.89/2.57/3.20, the company's current stock price corresponding to 2023-2025 PE multiples is 22/16/13 times, respectively. Considering the volume of the company's new business, the “buy” rating is maintained.
Risk warning: Risks such as production capacity expansion falling short of expectations; increased industry competition; and new orders falling short of expectations.