Summary of events: on October 20, 2022, Renner Intelligence disclosed three quarterly reports for 2022. In the first three quarters of 2022, the company achieved an income of 173 million yuan, an increase of 37.35% over the same period last year, a net profit of 35 million yuan, an increase of 190.23% over the same period last year, and a non-return net profit of 3.6732 million yuan, down 55.76% from the same period last year.

Comments:

The performance of Q3 alone is eye-catching, but the core of annual performance still depends on Q4. 3Q22, the company realized operating income of 77.266 million yuan, an increase of 39.1% over the same period last year, a net profit of 15.955 million yuan, an increase of 333.35% over the same period last year, and a non-return net profit of 5.8564 million yuan, an increase of 162.21%. The profit growth rate of the company's single Q3 showed a significant marginal improvement. However, the company's Q1-Q3 revenue accounted for about 1/4 of the company's annual revenue from 2020 to 2021, mainly because the order revenue of heating companies was generally recognized in the fourth quarter, so the performance of the first three quarters had a limited impact on the whole year.

The order amount shows a doubling growth and is optimistic about the annual performance. According to Zaizhao.com statistics, the company's bid-winning orders doubled from January to September 2022 compared with the same period last year, among which the number of 10 million-level large orders increased significantly compared with last year, and even 100 million orders appeared. According to the specific order, after the company won the bid for 240 million order for AI intelligent heating project of Zaozhuang Thermal Power Company in March, the company successively won the bid for Linshu County City low-carbon intelligent heating upgrading project (phase I) (order amount 84.98 million yuan), Weihai Thermal Power Group 2022 intelligent heating system renovation project (order amount 129 million yuan) and other large orders.

The company's project implementation is generally completed before November of the heating season, and we believe that the above orders are expected to cash in revenue in Q4, and the performance growth has a high degree of certainty.

It is expected that the new production base will be put into production in 2023, and the strong performance will be sustainable. On the supply side, according to the company's prospectus, the company's intelligent heating equipment production base is expected to be completed and put into production next year, and its production capacity is expected to double. In terms of demand, on the one hand, the market-oriented restructuring of heating companies has led to the outbreak of demand for self-financing, cost-reduction and efficiency; on the other hand, the landing of old funds has provided support for downstream order growth, and the strong performance of the company is sustainable.

Investment advice: give a "buy" rating. We estimate that from 2022 to 2024, the company's income will be 7.6 billion yuan, an increase of 43.3%, 41.9%, 30.2%, and a net profit of 2.4 million, an increase of 37.9%, 38.7% and 32.6%, respectively.

Risk hint: the landing of funds for gas pipeline transformation is not as expected; the epidemic affects the delivery of the project.