2023Q3 performance is in line with expectations. Profitability continues to improve under the scale effect. Maintaining the “buy” rating 2023Q1-Q3, the company achieved revenue of 18.976 billion yuan (+21.6%), net profit of 2.16 billion yuan (+32.7%), net profit of 2.16 billion yuan (+32.7%), and net profit of 2,223 billion yuan (+26.86%) after deducting non-return net profit of 2,223 billion yuan (+26.86%). Looking at 2023Q3, the company achieved revenue of 6,447 billion yuan (+18.5%), net profit of 765 million yuan (+22.5%), net profit of 765 million yuan (+22.5%), and net profit after deducting non-return net profit of 755 million yuan (+4.6%) in a single quarter. The difference in non-recurring profit and loss in a single quarter mainly comes from differences in profit and loss due to changes in fair value due to exchange rate fluctuations. The company's scale advantage is remarkable. Revenue growth and profit growth in the refrigeration/gas zero sector continue to be realized. We maintain our profit forecast. The net profit for 2023-2025 is 32.62/40.79/4.987 billion yuan, corresponding to EPS of 0.87/1.09/1.34 yuan, and the current stock price corresponding to PE is 32.2/25.8/21.1 times. Auto Zero is expected to maintain high growth based on previous potential. The outlook for energy storage and heat management and humanoid robots is worth looking forward to, maintaining a “buy” rating.
The 2023Q3 auto parts business has maintained a high growth rate, and the refrigeration sector has maintained a steady growth sub-business. The 2023Q1-Q3 refrigeration parts sector is expected to have revenue of +10% compared to 2023Q3 in a single quarter compared to 2023Q2, mainly due to the fact that the downstream refrigeration industry has gradually entered the off-season, benefiting from factors such as cost dividends, etc., and the sector's profit is expected to continue to increase. The 2023Q1-Q3 auto parts sector is expected to have revenue of +45% year-on-year. The 2023Q3 in a single quarter is expected to continue the impressive performance of 2023Q2, mainly due to the continued high growth in domestic new energy vehicles. Looking ahead, we will continue to focus on technology migration driving the growth of energy storage and heat management and the implementation of humanoid robots.
Product structure optimization+cost reduction+scale effect resonance continues to drive profit growth 2023Q1-Q3. The company's gross profit margin is 27.49% (+2.36pct). Looking at 2023Q3 gross profit margin of 30.77% (+3.9pct) in a single quarter, gross margin continued a year-on-year upward trend, or mainly due to factors such as shipping cost dividends+structure optimization+exchange rate optimization. On the cost side, the sales/management/R&D/finance expense ratio of the 2023Q1-Q3 company was -0.07/+0.4/+0.54/+1.07pct, respectively, and the 2023Q3 sales/management/R&D/financial expense ratio was -0.29/+0.56/+1.76/+3.8pct, respectively. The increase in the R&D expense rate was mainly due to the increase in the salary and remuneration of current personnel and direct investment, and the significant increase in the financial expense rate was mainly due to a decrease in exchange earnings in the current period (financial expenses rate -2.46% during the same period). Under the overall influence, 2023Q3 had a net profit margin of 11.86% (+0.4pct) and a non-net profit margin of 11.72% (-1.56pct), with a steady increase in profitability.
Risk warning: New business development falls short of expectations; new energy sales volume falls short of expectations; raw material prices rise, etc.