3Q22 performance is in line with our expectations
The company announced 3Q22 results: revenue was 1.045 billion yuan, up 13.1% from the same period last year, up 20.5% from the previous month; net profit from home was 66 million yuan, corresponding to 0.16 yuan per share, up 12.62% from the same period last year, up 72.6% from the previous month, which is in line with our expectations.
Trend of development
The results in the third quarter are positive compared with the previous quarter, and the overall business is expected to continue to improve. The company's Q3 production and operation recovered significantly, achieving a single-quarter revenue, profit, month-on-month positive growth, showing strong downstream demand and performance bottomed out. The company's revenue in the first three quarters was 2.74 billion yuan, an increase of 6.82% over the same period last year, and its net profit was 135 million yuan, down 21.8% from the same period last year. The company's quarterly net interest rate continues to recover, with quarterly net interest rates of 3.90% for 4Q21, 3.85% for 1Q22, 4.38% for 2Q22 and 6.30% for 3Q22. We are optimistic that the company's profitability will gradually repair the boost to performance and continue to improve in the future.
With the addition of electric drive business, a new company has been set up in Liangjiang New area to lay out the new energy automobile industry cluster in Sichuan and Chongqing.
The company's motor stator and rotor assembly ASP up to more than 5000 yuan, is the core supplier of Huawei automobile electric drive system, the products cover well-off, Changan, BAIC and other Huawei cooperative automobile enterprises. In addition, as a new supplier to BYD, the company's on-hand orders are rising rapidly; the company achieves mass production support for mainframe factories such as Geely, United Microelectronics Corp, Schaeffler and Tier 1. 3Q22, the company has set up a wholly-owned subsidiary Chongqing Xinquality in Liangjiang New area of Chongqing, and plans to bid for 53, 000 square meters of land in Liangjiang New area for capacity expansion. We believe that from the perspective of regional layout, Liangjiang New area has a new cluster of Huawei automobile industry, which is adjacent to the production bases of ideal, Changan and other automobile enterprises, and the company is expected to match the core customers of new energy vehicles in Sichuan and Chongqing region nearby. accelerate the pace of electric drive business development. We believe that with the continuous high growth of new energy vehicle sales and the rapid iteration of superimposed electric drive technology, the company's electric drive business will be accompanied by the rapid growth of head customers such as Huawei, BYD and Geely, with high certainty and high flexibility.
With the expansion of advantages in the field of metal stamping process and die, the business of battery precision structural parts is expected to generate revenue in 1H23.
The company established controlling shares Sun Company Zhejiang Xinqian New Energy Co., Ltd., and purchased land in Zhejiang headquarters for the production capacity construction of structural components business. In August, Sun holding Company set up a wholly-owned subsidiary in Ningde City, Fujian Province, supporting the production capacity around the core customers. We believe that the company has accumulated advantages in the field of metal stamping process and mould, battery structures and motor cores belong to horizontal expansion in manufacturing technology and methodology, and the company's entry into office battery precision structures is an industrial realization of existing technological advantages; with the start of construction of the headquarters base and the accelerated commissioning of Ningde base, the company is expected to generate revenue from the battery structure business in 1H23.
Profit forecast and valuation
Taking into account the slow release of new business profits, we cut 2022 Universe's 2023 net profit by 6.6% of Universe 14.0% to 220,000,000 yuan. The current share price corresponds to a price-to-earnings ratio of 24.2 times 2023 / 20.4 times 2023. Maintain the outperform industry rating, consider the slow release of new business profits, and lower the target price by 26.3% to 19.3 yuan, corresponding to the price-to-earnings ratio of 35.4 times / 29.9 times in 2023, which is 46.0% higher than the current stock price.
Risk
The expansion of new energy business is not as expected, and cost control is not as expected.
