The company announced its performance forecast for the third quarter of 2023. Net profit for the first three quarters is expected to reach 2.166 billion yuan to 2,394 billion yuan, an increase of 228%-262% over the previous year. Net profit after deducting non-attributable net profit for the first three quarters was 1,296 billion yuan to 1,524 billion yuan, an increase of 96-131% over the previous year. Looking at the 23Q3 quarter, the company's net profit totaled about 269 million yuan to 497 million yuan (median value of 383 million yuan, up 30% from the previous year); net profit after deducting non-attributable net profit was about 261 million yuan to 489 million yuan (median value of 375 million yuan, up 20.18% year on year, down 32.70% from the previous year). The performance forecast for the third quarter is basically in line with market expectations. We believe that the month-on-month decline in performance is mainly due to the return of US semi-trailer prices and the cost of optimizing the Starlink Program organization. In the future, the company's US business is expected to become the company's profit base, and domestic profits are expected to gradually increase along with production and personnel optimization. Furthermore, we continue to be optimistic about the valuation increase brought to the company by electric semi-trailers. We maintain the company's 2023 net profit forecast of 2.7 billion yuan, of which non-net profit forecast is 1.9 billion yuan, and maintain the A+H share “buy” rating.
The company released a third-quarter performance forecast, which is in line with market expectations. Net profit for the first three quarters is expected to reach 2.166 billion yuan to 2,394 billion yuan, up 228%-262% year on year. Net profit after deducting non-return income for the first three quarters was 1,296 billion yuan to 1,524 billion yuan, up 96-131% year on year. Looking at the 23Q3 quarter, the company's net profit totaled about 269 million yuan to 497 million yuan (median value of 383 million yuan, up 30% from the previous year); net profit after deducting non-attributable net profit was about 261 million to 489 million yuan (median value of 375 million yuan, up 20.18% year on year, down 32.70% from the previous year).
The company continued to consolidate its main business and give full play to its advantages in transoceanic operations, and its performance in the first three quarters maintained a year-on-year growth trend.
Organizational optimization incurs one-time costs, opening up room for future cost reduction. The company's 23Q3 performance declined to a certain extent compared to 23Q2. We believe the main reasons include the following points: (1) the supply chain shortage situation in the North American semi-trailer market has been alleviated, supply and demand for semitrailers have returned to normal, and unit price and profit contributions may return to normal levels; (2) the domestic semi-trailer market is slowly recovering. According to official media such as the company's WeChat account, Starlink plans to be implemented in the third quarter. Comprehensive organizational development adjustments and optimization have been carried out, so it is possible to optimize the organization's one-time expenses in a single quarter; (3) China's real estate market and infrastructure restoration are slow Su, Chinese special vehicle The market business has not yet recovered, and this part of the company's business has caused certain losses. We believe that the costs generated by optimizing the company's organization have a great impact on profits in a single quarter. If this cost is added back, the company's performance is basically in line with market expectations, and it is expected that the company's labor costs will be reduced in the next few years, opening up space for cost reduction.
Multiple factors are improving overall, and future growth potential can be expected. We believe potential future business growth factors include:
(1) Organizational optimization is expected to significantly reduce future labor costs and greatly improve organizational efficiency; (2) The implementation of the Starlink plan is expected to increase the capacity utilization rate and market share of domestic semi-trailers, and optimize costs and sales prices from the perspective of collection and marketing to improve overall profit margin; (3) The company's 23Q2 profit in Europe is the best in history, and there may be room for further improvement in future growth and valuation; (4) We predict that electric semitrailers may be launched by the end of the year, opening up future growth and valuation space; (5) Strong demand in emerging markets, and continued to bring new development kinetic energy.
Risk factors: China's infrastructure and logistics recovery fell short of expectations; China's new energy heavy truck penetration rate fell short of expectations; disturbances caused by sudden geopolitical events; risk of shortage of raw material supply; and the level of intense competition in the US semi-trailer industry exceeded expectations.
Profit forecasting, valuation and rating: The company is the company with the largest market share of semitrailers in the world in the past nine years, and is currently one of the companies most actively deploying new energy semitrailers. We think the positive impact of the return of manufacturing in North America is worth paying attention to. As domestic, European and Southeast Asian semi-trailer market demand continues to recover, we expect the company's strong profit performance to continue. Furthermore, we continue to be optimistic about the valuation increase brought to the company by electric semitrailers. We maintain the company's 2023/24/25 net profit forecast of 27.24/27 billion yuan, corresponding to the company's 2023/24/25 EPS forecast of 1.35/1.18/1.33 yuan. Maintain the target price of A shares of $20 and the target price of H shares of HK$13 in 2023, maintain the “buy” rating for A+H shares, and is highly recommended.