The company's 23Q3 performance grew steadily, with the improvement of business structure and cost control measures, the improvement of gross profit margin and the improvement of management efficiency. At the same time, the situation of operating cash flow also gradually improved. Recently, the company has been actively expanding overseas markets such as Russia, and overseas business may become another growth pole of the company. Maintain a strong recommendation.
Event: the company disclosed three quarterly reports, 2023Q1-3 revenue 252 million yuan, YoY + 18.23%; return to the mother net profit of 64 million yuan, YoY + 24.98%; deduction of non-return net profit of 63 million yuan, YoY + 23.32%.
23Q3's single-quarter revenue is 113 million yuan, YoY+ 15.18%; net profit is 26 million yuan; YoY+14.44%; deducts non-return net profit 26 million yuan, YoY+ 14.20%. The performance is in line with expectations.
The improvement in business structure has led to a continued increase in gross profit margin. The company's gross profit margin in the first three quarters was 56.74%, which was 55.56% higher than the same period last year and 0.88pct was higher than the same period last year. This continues the trend of increasing gross profit margin in the first half of the year. We believe that this is mainly due to the decrease in the proportion of local total contracting business in the company's income structure and the increase in the proportion of intelligent geological security, intelligent mining and cloud GIS with relatively high gross profit margin.
Reduce the cost and control fee to improve the management efficiency. In the first three quarters of the company, the sales / management / R & D expense rates were 6.45%, 7.29% and 12.87% respectively, down 0.61% and 1.85%, respectively. The sales / management / R & D expense rates of 23Q3 were 6.84%, 6.15% and 9.70%, respectively, down 0.16/1.67/2.96pct from the same period last year. The growth rate of the company's personnel budget this year is lower than that of income growth, and the level of human efficiency continues to improve, resulting in a decline in the rate of expenses during the period.
The operating cash flow situation has improved. The company received 155 million yuan in cash for selling goods and providing services in the first three quarters, YoY+ 28.07%; operating net cash flow-31 million yuan, YoY+3.49%. The improvement in cash flow is due to the company's more stringent collection measures.
Overseas may become another core driver of growth. At present, the key development areas of the company's overseas business are in Russia, Kazakhstan and other countries. at the end of August, the company disclosed that it had signed a strategic cooperation agreement with Oros Spard Coal Co., Ltd. it is agreed to assist Laspard Coal Co., Ltd. to carry out the construction of smart mines by using the company's technology, equipment and related experience in the field of smart mines. The agreement is valid for 5 years. Laspard Coal is the largest coking coal producer in Russia, with eight underground mines, two open-pit mines and three coal preparation plants with an annual output of more than 20 million tons. At present, it mainly needs the core products of Longsoft, such as intelligent mining, intelligent tunneling and integrated automatic control.
Maintain the "highly recommended" investment rating. It is estimated that the company's revenue from 2023-2025 will be RMB 644, 838 million for YoY+, 35%, 31%, and 210 million for YoY+, and the current share price of YoY+42%/37%/34%, will correspond to the current share price of 24Unix, 17max, and 13x. We are optimistic about the optimization of the business model brought about by the intelligent mining face and cloud GIS products under the general trend of intelligent coal mine, and continue to strongly recommend it.
Risk tips: downstream customers'IT expenditure is less than expected risk; new product / business market development is not as expected, etc.