Key points of investment
The company's third quarter results were outstanding
In the first three quarters of 2023, the company achieved revenue of 192 million yuan, a year-on-year increase of 45.27%, and achieved net profit of 96.979 million yuan, an increase of 52.8% over the previous year. Benefiting from the continuous verification and introduction of the company's products by downstream users, the gradual increase in projects entering trial production and mass production stages, and the company's sales revenue and profit both had a high year-on-year increase. Among them, in the third quarter, the company achieved operating income of 95.5598 million yuan, an increase of 48.47% year on year; net profit returned to mother in the third quarter was 56.025 million yuan, an increase of 73.11% year on year. The company maintained a high gross profit margin, achieving a gross profit margin of 85.76% in the first three quarters. Among them, the gross profit margin for the third quarter was 86.4%, up 0.05% month-on-month and 0.25% year-on-year decrease.
Equity incentives reinforce competitiveness and are beneficial to long-term development
The first meeting of the second board of directors and the first meeting of the second board of supervisors held on October 26, 2023 reviewed and passed the “Proposal on Granting Restricted Shares for the First Time to Incentive Recipients”, agreed to determine October 26, 2023 as the first grant date, and agreed to grant 2.6737 million restricted shares to 59 incentive recipients who met the grant conditions at a grant price of 26.74 yuan/share. The implementation of equity incentives is conducive to motivating the company's core management and technical backbone, consolidating the company's competitiveness, and contributing to long-term development.
The company's downstream expansion into the field of intelligent driving is expected to usher in increased performance. The company's high-performance inertial sensor products can be applied to fields such as autonomous driving and high-end industry, and the market space is quite broad. The company's subsidiary Xindong Technology targets the automotive intelligent driving industry and provides high-precision, high-quality, and low-cost vehicle integrated navigation and positioning systems and related products for various car companies and intelligent driving solution suppliers. The company is developing high-performance MEMS IMU products and functional safety 6-axis MEMS IMU products suitable for autonomous driving applications. High-performance inertial sensor products can also be used for balance control of humanoid robots. The company has outstanding technical capabilities and is expected to expand and share the growing downstream market.
Investment advice
We expect the company to achieve revenue of 327/4.68/670 million yuan in 2023-2025, and realized net profit of 1.73/2.51/343 million yuan respectively. The current stock price corresponding to 2023-2025 PE is 86/59/44 times, respectively, maintaining the “gain” rating.
Risk warning
New product development falls short of expectations; market expansion falls short of expectations; market competition intensifies; market demand falls short of expectations.