Event: the company released its three-quarter report for 2022. During the reporting period, the company achieved revenue of 150 million yuan, a decrease of 9.0% over the same period last year, and a net profit of 50 million yuan, a decrease of 9.3% over the same period last year. In the single quarter of Q3, the revenue was 60 million yuan, an increase of 5.2% over the same period last year and 84.5% from the previous year, and the net profit from the home was 30 million yuan, an increase of 15.1% over the same period last year and 176.8% from the previous year. Q3 performance growth compared with the same period last year, profitability month-on-month repair is obvious.

The operation of Q3 company returned to normal, and its performance improved significantly compared with the previous month. From March to May 2022, due to the poor logistics of the epidemic in Shanghai, the receiving and sending of testing business samples and the door-to-door service of metrology business personnel were restricted, so revenue and profits decreased compared with the same period last year. Since June, the company's business activities have gradually returned to normal, and the year-on-year growth rate of revenue in the first three quarters has narrowed to-9.0% from-17.1% in the first half of the year. At present, the company has taken a number of measures to complete the on-hand order, and all the work has been carried out smoothly.

The proportion of medium and high voltage cable testing business increased, and Q3 gross profit margin and net profit rate increased significantly compared with the previous month. In the first three quarters of 2022, the company's comprehensive gross profit margin was 63.2%, an increase of 1.0% over the same period last year; the net profit rate was 34.0%, a slight decrease of 0.1% over the same period last year; and the expense rate for the period was 25.0%, an increase of 0.4% over the same period last year. In terms of breakdown, the rates of management and sales expenses were 15.1% and 3.1% respectively, an increase of 3.0% and 0.3% respectively over the same period last year, and the rates of financial and R & D expenses were-1.1% and 7.8% respectively, down 2.9% and 0.1% respectively. In a single quarter, Q3's comprehensive gross profit margin was 65.1%, an increase of 0.8% over the same period last year and 6.6% over the same period last year; the net profit rate was 39.8%, an increase of 3.4% over the same period last year and 13.3% from the previous quarter; the periodic expense rate was 24.2%, down 2.4% from the same period last year and 1.8% from the previous year The increase in gross profit margin is mainly due to the increase in the proportion of the company's high value-added medium and high voltage cable testing business after the epidemic, and the increase in net profit margin is higher than that of gross profit margin mainly due to the increase of interest, exchange earnings and government subsidies.

The company is the leader of third-party cable testing, with the promotion of fund-raising projects, the market share is expected to further increase. The company has leading new energy and high-end equipment cable testing technology at home and abroad. with the rapid development of downstream wind power, photovoltaic and other new energy power, the company actively responds to market demand and makes multiple efforts in products, markets and production capacity: set up national cable Guangdong to expand the testing service radius, implement laboratory automation and intelligent transformation and upgrading plans, and steadily promote the expansion of ultra-high voltage and medium-and low-voltage cable testing capacity. And continue to expand in addition to the power grid, rail traffic, aviation, nuclear power, 5G, new energy vehicles and other testing areas, the follow-up growth momentum is sufficient.

Profit forecast and investment advice. It is estimated that the company's net profit from 2022 to 2024 will be 0.77,1.08,154 million yuan respectively, with a compound growth rate of 28% in the next three years, maintaining the "hold" rating.

Risk tips: credibility and brand affected risk, main business single risk, epidemic repeated risk.