The company released its 2023 three-quarter report: the first three quarters of 23 years achieved revenue of 1,334 million yuan, up 24.39% year on year; realized net profit of 150 million yuan, down 9.80% year on year; realized net profit deducted from non-return mother was 131 million yuan, down 8.89% year on year.
Q3 Revenue increased month-on-month, and production capacity for new projects was released. Among them, 23Q3 achieved revenue of 509 million yuan, an increase of 41.49% over the previous year; realized net profit of 60 million yuan, an increase of 25.51% over the previous year; and realized net profit after deducting non-return mother's net profit of 53 million yuan, an increase of 21.29% over the previous year. The year-on-year increase in the company's 23Q3 revenue was mainly due to the gradual release of production capacity from new projects and the overall growth of the company's automobile business.
Q3 Gross margin improved month-on-month, and the period expense ratio decreased. The gross profit margin of the 23Q3 company was 29.74%, -2.39pct, 0.30pct; the net profit margin was 11.82%, -1.96pct, and 1.6pct month-on-month.
By splitting the cost ratio, 23Q3 companies achieved a sales/management/R&D/financial expense ratio of 0.98%/4.72%/4.32%/4.13%, achieving -0.36pct/-1.34pct/-1.28pct/0.09pct, respectively. The company's gross margin improved month-on-month, and we expect an increase in the company's capacity utilization rate.
The product matrix is complete, covering leading NEV companies. The company's differential products have basically achieved full coverage of new energy vehicle manufacturers. It has cooperated with leading new energy customers such as BYD, Geely, NIO, and Ideal, and the customer structure continues to be optimized. At the same time, the company's product matrix has been improved, and new projects such as differentials, motor shafts, and precision planetary reducers are progressing according to plan, which is expected to continue to drive rapid growth in the company's future performance.
Convertible bonds expand production capacity and explore the field of robotics. The company announced the first phase of the convertible bond automobile differential assembly project and the new energy vehicle key component project, including a production base for automobile differential products with an annual output of 5 million sets, plans to build a new differential shell casting, machining production line, planetary semi-axle gear forging, machining production line, assembly line, and test center to verify the strength, accuracy, and longevity of various types of differential assemblies for hybrid, electric and fuel vehicles. The company's planetary reducer has the characteristics of high precision, high torque, high efficiency, and more accurate transmission. The subsidiary Chongqing Haoneng is investing in construction, and is expected to explore the field of robotics in the future.
Investment suggestions: The company's production capacity continues to expand, the customer structure is excellent, and it is building a supplier of differential assemblies.
The estimated revenue for 2023-2025 is 18.5/23.3/2.97 billion yuan, corresponding to net profit of 2.3/2.8/390 million yuan. The current market value corresponding to 2023-2025 PE is 21.4/17.3/12.4, 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.