Net profit for the first three quarters was +101% year-on-year, and profitability increased significantly. In the first three quarters, the company achieved revenue of 0.934 billion yuan, +33.57% year over year; net profit to mother was 0.238 billion yuan, +101.01% year over year. The company's gross profit margin for the first three quarters was 48.86%, +2.77pct year on year; net profit margin was 25.51%, +8.56pct year on year.

Third-quarter results were +166% year over year, and net interest rate increased significantly year over year. In the third quarter, the company achieved revenue of 0.364 billion yuan, +40.84% year-on-year, and +10.35% month-on-month; net profit to mother was 0.098 billion yuan, +166.07% year-on-year, and +19.27% month-on-month. The company's gross profit margin for the third quarter was 49.21%, +3.80 pct year on year, -0.94 pct month on month; net profit margin was 26.90%, +12.66 pct year on year, +2.01 pct month on month.

New orders were added +30% year-on-year in the first three quarters, and more measures were taken to continue to restore profitability. The company's new orders increased by about 30% year-on-year in the first three quarters. Among them, the overseas market growth rate was higher than that of the domestic market. In 2022, the company's active expansion of the non-wind power sector caused three expenses to increase. The net interest rate level declined in 2022 to 2023. With the gradual completion of early expansion of new business and continued cost reduction and fee control for related products, the company's net interest rate has gradually rebounded since 2024.

Orders for heavy loads and rack and pinion elevators account for 30%, increasing the value of a single unit. In 2023, the company's new orders for heavy load and rack and pinion lifts accounted for about 20% of elevators; in the first three quarters of 2024, new orders for heavy load and rack and pinion lifts accounted for more than 30% of elevators. As the height of towers and the proportion of mixed tower applications continue to increase after large-scale construction, the market demand for high-load and rack and pinion elevators is growing rapidly, and the value of a single fan lift equipment is expected to increase.

The company continues to advance its global layout, and the risk of US trade sanctions is manageable. The company already has wholly-owned subsidiaries in Germany, the United States, India, Japan, Brazil, etc., and the wind power business is all over the world, accounting for more than 50% of overseas revenue in the first half of 2024. Wind power lifting equipment is a niche market, and the company has a high share of the US market, so it is unlikely that tariffs will be imposed in the future.

The non-wind power sector grew rapidly, with revenue in the first three quarters far exceeding the full year of '23. The company continues to expand the non-wind power sector, with revenue of about 13 million yuan in 2023, an increase of more than 6 times; in the first three quarters of 2024, the company's revenue in the non-wind power sector was close to 2 times that of last year, an increase of nearly 3 times over the previous year.

Risk warning: Overseas market development falls short of expectations; raw material prices have risen sharply; industry competition has intensified.

Investment advice: Raise profit forecasts and maintain the “better than the market” rating.

The profit forecast was raised to take into account the company's new orders and profit recovery. We expect the company to achieve net profit of 0.334/0.428/0.555 billion yuan in 2024-2026 (the original forecast value was 0.307/0.391/0.53 billion yuan). The PE corresponding to the current stock price is 18/14/11 times, respectively, maintaining a “better than the market” rating.