Event: The company released its 2023 three-quarter report. 2023Q1-Q3 achieved revenue of 4.106 billion yuan, +3.85% year-on-year, net profit of 1,142 billion yuan, -8.10% year-on-year, net profit of 878 million yuan, -15.76% year-on-year, gross profit margin of 39.78%, year-on-year -5.03pct. In the single quarter of 2023Q3, the company achieved revenue of 1,477 billion yuan, +39.30% /+2.54% month-on-month, net profit of 411 million yuan, +35.44% /-0.05% month-on-month, net profit of 309 million yuan after deducting non-net profit of 309 million yuan, +32.44% /-18% month-on-month, gross profit margin of 39.88%, year-on-year +1.06pct/month-on-month -0.12pct.
Revenue continued to grow month-on-month, a recovery trend was established, and a moderate recovery is expected to continue in the fourth quarter: the company's revenue increased slightly month-on-month, a moderate recovery trend was established, and industry Q2 entered the inventory replenishment stage, so Q3 goods were relatively stable. Looking ahead, Q4 is likely to maintain a steady pace of recovery. 2024 is expected to enter an upward cycle of consumer electronics, driving further recovery in MLCC demand.
The share of MLCC high-capacity products continues to rise, leading mainland manufacturers, and communication products are expected to recover next year: the company's MLCC high-capacity products continue to rise in Q3, and the operating rate has increased moderately, leading mainland MLCC manufacturers. The company's main business, such as ferrule sockets and PKG, is affected by demand for downstream server optical fiber and crystal oscillators. Demand for the whole year is relatively lackluster. As demand for AI servers continues to grow, the company's related business is expected to rise steadily in 24 years.
Investment advice: Looking ahead to the whole year, we are still optimistic that passive components will continue to recover, and downstream consumer electronics shipments will gradually break out of the trough. The company has steadily increased the volume of high-capacity and automotive-grade products to achieve domestic replacement of high-end products. We expect the company's net profit for 2023/2024/2025 to be 1,566/20.26/2,509 billion yuan, EPS to be 0.82/1.06/1.31 yuan/share, corresponding PE to 39.12/30.24/24.42 times, maintaining the “increased holdings” rating.
Risk warning: technology research and development risk; risk of large accounts receivable amount; risk caused by management ability not being able to adapt to the company's development needs.