Description of the event
The company released its three-quarter report for 2023. The first three quarters achieved revenue of 4.9 billion yuan, an increase of 22%; net profit to mother was 480 million yuan, an increase of 59%; of these, Q3 achieved revenue of about 1.6 billion yuan, an increase of 24% over the previous year, and net profit to mother of about 90 million yuan, an increase of 16% over the previous year.
Incident comments
On the revenue side, 2023Q3 achieved revenue growth of more than 20% year-on-year and maintained a high growth rate. We expect to mainly benefit from the joint growth of multiple product lines, including new energy, automation, intelligent equipment, etc., to verify that the company's business structure has strong growth momentum.
On the profit side, the company achieved a gross profit margin of 25% in 2023Q3, a year-on-year increase of 1.5 pct, and a month-on-month decrease of 0.7 pct. It is expected to be mainly due to changes in product structure. In terms of expenses, the company's expense ratio for the 2023Q3 period was about 21.0%, up about 1.6 pct year on year, and about 4.6 pct month over month. Among them, the year-on-year dimension was mainly due to the increase in sales expenses rate, management expense ratio, and financial expense ratio, while the month-on-month sales expense ratio, management cost rate, R&D cost rate, and financial expense ratio all increased. Specifically, the company's 2023Q3 sales expense ratio was about 5.2%, up about 1.1 pct year on year, up about 0.54 pct month on month, management expense ratio was about 3.2%, up about 0.64 pct year on year, about 0.39 pct month on month, R&D cost rate was about 11.9%, down about 0.65 pct year on year, up about 2.26 pct month on month, financial cost ratio was about 0.74%, up about 0.56 pct year on year, up about 1.4 pct month on month. At the same time, the company achieved net investment income of about $03 billion in the 2023Q3, generating net income of about $0.1 billion due to changes in the fair value of the investment company. Compared with previous quarters, it also generated asset impairment losses of about $03 billion, and accrued credit impairment losses of about $0.2 billion. In the end, the company's net profit to mother was about 90 million yuan, an increase of 16% over the previous year.
In terms of other financial indicators, the company's net operating cash flow inflow for Q3 was about 50 million yuan, an increase over the previous month, indicating that the company's operating conditions were healthy and good. The Q3 capital expenditure was about 120 million yuan, all of which increased year-on-month, which is expected to be mainly due to the company actively promoting production capacity construction.
The company's net profit for 23 and 24 is estimated to be about 630 million yuan and 760 million yuan, respectively, corresponding to the 23 and 24 valuations, 19 and 15 times, respectively. Maintain a “buy” rating.
Risk warning
1. The risk of a sharp increase in the price of raw materials;
2. The pace of expansion in new fields fell short of expectations.