Event: the company released its Triple report for 2023. In the first three quarters of 2023, the company achieved operating income of 781 million yuan, an increase of 7.79% over the same period last year, and a net profit of 146 million yuan, an increase of 9.40% over the same period last year, deducting 121 million yuan of non-return net profit, an increase of 16.59% over the same period last year. 2023Q3, the company achieved operating income of 234 million yuan, a decrease of 8.03% from the previous month, an increase of 0.03% over the same period last year; a net profit of 28.35 million yuan, a decrease of 52.29% from the previous month and a decrease of 12.78% over the same period last year; and a net profit of 27.06 million yuan from the previous year, a decrease of 51.06% from the previous month and a decrease of 13.02% over the same period last year.

Comments: weak electronic demand is a drag on tantalum powder sales, and fire business orders are full.

Price: in the first three quarters of 2023, the gross profit margin of the company was 17.58%, an increase of 0.46% over the same period last year. The gross profit margin of the company of 2023Q3 was 18.48%, which decreased by 3.1pct and increased by 3.05pct compared with the same period last year.

Tantalum and niobium main business: in the first three quarters of 2023, the total profit of the company's tantalum and niobium main business was about 65.32 million yuan, an increase of 63.68% over the same period last year. The total profit of the company's tantalum and niobium main business was about 15.5 million yuan, a decrease of 51.91% compared with the previous year and an increase of 28.69% over the same period last year. At the operational level, the company's fire plant superalloy, superconducting niobium and other products orders are very strong, full production capacity; tantalum powder, consumer electronics demand is still weak drag tantalum powder sales, tantalum powder sales decline.

Investment income: in the first three quarters of 2023, the company's investment income in joint ventures and joint ventures was 63.48 million yuan, an increase of 3.98% over the same period last year. 2023Q3's investment income in joint ventures and joint ventures was 13.29 million yuan, a decrease of 51.57% month-on-month and 39.89% lower than the same period last year. A significant decline in investment income dragged down the performance of homecoming net profit in the third quarter.

Fixed increase: the company has completed the fixed increase project issuance, the fixed increase issue price is 11.38 yuan per share, the number of shares issued is 59.2818 million shares, the total amount of funds raised is 675 million yuan, after deducting the issuance expenses excluding tax, the net amount raised is 670 million yuan. China Nonferrous Mining Group subscribed for 4.4622 million shares with a subscription amount of 50.78 million yuan.

Core points: 1) the market-oriented incentive reform has achieved remarkable results, coruscating the new life of state-owned enterprises. 2) continuous breakthroughs in innovation and R & D to enhance the momentum of development. Based on the main industry of tantalum wire tantalum powder, the company actively develops high-end applications in high-end fields, such as superalloy, semiconductor tantalum target, tantalum medical products, RF superconducting cavity and so on. 3) fixed increase to achieve capacity expansion to support long-term growth. The company's additional projects expand the production capacity of pyrometallurgy, product processing and RF superconducting cavity to support the increasing demand for the development of new products. 4) Western Materials Institute is the only beryllium research and processing base in China, steadily increasing the company's profits.

Investment suggestion: the company is the benchmark for the reform of state-owned enterprises. Through the active implementation of market-oriented incentive reform and continuous innovation and research and development, the improvement of quality and efficiency is remarkable. As the leader of domestic tantalum, niobium and beryllium industry, the main industry of tantalum wire tantalum powder is growing steadily, at the same time, new products are constantly introduced to add growth momentum in the field of high-end applications, and the company is expected to achieve multi-point flowering with supporting expansion at the capacity end with fixed increase projects. Future performance is expected. We adjusted the company's homing net profit for 2023-2025 to 259 million yuan, respectively, corresponding to the closing price on October 24, and the PE for 2023-2025 was multiple of 27-24-20, maintaining the "recommended" rating.

Risk tips: raw material price fluctuation risk, new product research and development is not as expected, downstream demand is not as expected.