Core views:
The company's 23Q3 net profit before and after deducting net profit was +112.6% and +73.7% year-on-year, respectively, -30.1% and -23.1% month-on-month. The company achieved revenue of 8.34 billion yuan in the first three quarters of 23 years, -14.4% year-on-year; net profit before and after deducting net profit of 13.2 billion yuan and 1.2 billion yuan respectively, was +4.4% and -10.6% year-on-year respectively. The company achieved revenue of 2.21 billion yuan in 23Q3, -15.2% year-on-year and -25.9%; net profit before and after deducting net profit of 3.7 billion yuan and 3.7 billion yuan respectively, +112.6% and +73.7% year-on-year, respectively, -30.1% and -23.1% month-on-month. The year-on-year decline in the company's revenue for the first three quarters of this year may be related to the increase in sales of heavy natural gas trucks having a certain impact on the fuel injection business. The company's 23Q3 gross profit margin and net profit margin were 17.5% and 17.5%, respectively, +6.6pct, +10.3pct, +0.3pct, +0.3pct, month-on-month, and -1.1pct; sales, management, R&D, and financial expenses were +1.0pct, +1.1pct, +0.2pct, -0.2pct, month-on-month, +0.9pct, +1.9pct, +0.2pct, +0.3pct.
The company's own capital is still plentiful, the financial situation is good, and the dividend rate may be expected to recover. The company's monetary capital, notes receivable, accounts receivable financing, other current assets, and transactional financial assets totaled 7.04 billion yuan at the end of 23Q3, down 1.9% from the end of 22Q3, but still quite abundant. At the same time, the company's balance ratio at the end of 23Q3 was 28.7%, interest-bearing debt/total invested capital was 8.3%, and the long-term capital liability ratio was only 4.6%. The 2022 dividend was affected by the platform's trading business. Depending on the handling of the incident this year, the dividend rate may be expected to recover.
Profit forecast and investment advice: The company's product barriers are high, operations are steady, and profit and dividend stability can be expected. The equity incentive plan will fully mobilize the enthusiasm of the company's senior management and core personnel to make it more consistent with shareholders' interests. Considering the impact of non-recurring profit and loss, we expect the company's EPS in 23-25 to be 1.85/2.22/2.63 yuan/share, respectively, and the current stock price corresponding to PE is 8.94/7.45/6.27 times, respectively. Combining the company's historical valuation and the recent PE valuation center for international parts companies, we gave the company 15 times PE for 23 years, with a reasonable value of 27.70 yuan/share, maintaining a “buy” rating.
Risk warning: The epidemic has been repeated, the macroeconomic economy has fallen short of expectations, and the downstream boom has fallen short of expectations.