23Q3 revenue of 462 million yuan, same decrease of 21.1%, net profit of 0.18 million yuan, same decrease of 72.1%

The company's 23Q1-3 revenue decreased by 22.2%; 23Q1/Q2/Q3 revenue and year-on-year growth rate were 328 million (yoy -20.8%), 439 million (yoy -24.3%), 462 million (yoy -21.1%); 23Q1-3 net profit was 63 million, down 56.4%; 23Q1/Q2/Q3 net profit and year-on-year growth rate were 18 million (yoy -18.9%) and 0.27 billion (yoy -53.6%), respectively. 0.18 billion (YOY -72.1%);

23Q1-3 gross profit margin 18.8%, same minus 3.1 pct, net profit margin 4.8%, same minus 4.4 pct

23Q1-3 sales expense ratio is 5.6%, same increase of 1.0 pct; management (including R&D) cost rate is 9.0%, same increase 1.2 pct; financial expense ratio is -0.26%, same increase 1.0 pct. The increase in financial expenses is mainly due to a decrease in exchange earnings. In addition, the net cash flow from 23Q1-3 operating activities was 57.44 million yuan, a decrease of 84%, mainly due to a decrease in receivables due to a decrease in operating income. The reason for the year-on-year decrease in the company's Q3 gross margin is due to factors such as the international situation and inflation. Demand from overseas markets has weakened, the company's export revenue has decreased, and production capacity utilization has declined, making it difficult for the company to form a large-scale effect in the manufacturing process to reduce unit costs. As the scale of revenue increases, the company's gross margin level will continue to rise compared to the same period in 22 years; as the scale of revenue increases, the company's gross margin level will continue to rise.

The IPO fund-raising project completed construction and production base for the newly established subsidiary progressed in an orderly manner according to plan

The company's IPO fund-raising project “Biodegradable Material Products and High-end Plastic Products Production Line Construction Project” was completed in September of this year; the company's newly purchased plot in Ningbo was used for the “120,000 tons of biodegradable materials and products, household goods project” and the company purchased a new plot in the Laibin Industrial Park to invest in the construction of the “100,000 tons of sugar bagasse degradable environmentally friendly material products project” is currently being built according to the plan. At present, the basic construction of the plant has been completed; the company's new subsidiary in Thailand and the production base it has invested in is being further improved. Company product line , expand the company's production capacity and sales scale, and generate benefits. In the future, the company will adjust production capacity investment according to factors such as strategic planning and market demand, taking into account the existing production capacity layout and reasonable arrangement.

High quality customer resources to increase business scale and increase contribution

The company's cooperative customers are all large well-known enterprises at home and abroad, and the increasing business scale of the company year by year with these customers is part of the company's growth; at the same time, since the market share of these customers themselves is also increasing year by year, as cooperation deepens, the company's own production advantages, operating capacity, and level of quality control, etc., the company is expected to win new orders from the new market share of existing customers.

Master the modification technology of fully biodegradable materials, and have large-scale intelligent manufacturing technology for high-quality products

The company has advanced biodegradable material modification and product manufacturing technology, and is a manufacturer of single champion products for biodegradable household plastic products in the country, as well as the first drafting unit and main participant of relevant national standards; the company laid out the field of biodegradable material modification and products earlier, biodegradable material products have passed many mainstream certifications and achieved continuous stable sales, and has a first-mover advantage; the company has a first-mover advantage; the company has a long range of biodegradable materials modification, product manufacturing and mold manufacturing capabilities. The biodegradable materials and products industry chain has a long coverage, and can quickly respond to customer needs and control production costs.

Maintain steady growth in export sales and strengthen international market development

The company will continue to maintain the steady growth of its existing export business, continue to strengthen international market development, expand new customer channels while increasing the company's supply share among its original customers, and seize the time of implementation of the international plastic ban and restriction policy to increase sales of degradable products and reusable products in the European and Australian markets; at the same time, increase investment in the domestic market, promote the rapid development of the domestic market through the international market, and adopt a strategy of exaltation with the company's strong production and operation capabilities. Priority is given to developing large customers, quickly building brand awareness, and vigorously developing domestic sales Growth.

Adjust profit forecasts and maintain the “increase in holdings” rating

The company is a high-tech enterprise engaged in R&D, production and sales of plastic products, biodegradable materials and products, and plant fiber products. The company's main business covers: plastic products, biodegradable materials, biodegradable products, plant fiber products, paper products, etc., providing one-stop green food packaging product solutions for catering, tea, supermarket chains, aviation, and major sporting events. Considering the impact of factors such as the international situation and inflation, demand in overseas markets has weakened, the company's export revenue has decreased, and production capacity utilization has declined, making it difficult for the company to achieve a large-scale effect in the manufacturing process to reduce unit costs, leading to an increase in manufacturing costs for unit product amortization, which has led to a decline in the company's performance. The company's net profit for 23-25 is expected to be 0.90/1.25/1.44 (original value was 2.20/2.77/3.30, respectively), EPS is 0.47/0.65/0.75 yuan/share, and corresponding PE is 40/29/25x, respectively.

Risk warning: risk of raw material price fluctuations; risk affected by macroeconomic, policy and environmental changes; exchange rate risk; risk of impairment of goodwill; management risk, etc.