23Q3 operating income / homing net profit year-on-year-31.5% Universe 2.4%, maintaining "Buy" rating

The company's 9M23 realized revenue / return net profit / deducted non-home net profit of RMB 1.41 billion, compared with the same period last year. The net profit achieved by the company was-12.4%, 11.0% and 4.1%, and the net profit was in line with our expectations (RMB 110 million). Among them, 23Q3 realized revenue / return net profit / deducted non-return net profit of 4.1 billion yuan, compared with-31.5%, 2.4% and 14.7%, respectively. Taking into account the slow execution of orders since the beginning of this year, we have adjusted the company's 2023-2025 return net profit forecast to 2180.274pm (the previous value is 2.36x319,000,000), which is comparable to the company's 23-year Wind consensus forecast 25xPE. The grain and oil cold chain service industry that the company is in benefits from strategic security needs, medium-and long-term prosperity is good and sound, and it is recognized to the company for 23 years of 33xPE. Adjust the target price to 14.03 yuan (the previous value is 17.72 yuan) and maintain the "buy" rating.

9M23 comprehensive gross profit margin continues to rise, research and development and impairment increase affect net profit margin increase the company's profitability steadily improved, 9M23 comprehensive gross profit margin of 24.6%, year-on-year + 5.5pct Q3 single-quarter 28.4%, year-on-year + 10.6pct, month-on-month + 5.7pct. The expense rate during 9M23 is 13.7%, which is + 1.8pct compared with the same period last year, mainly due to the increase in R & D expenditure and the decline in income scale. Among them, the rate of sales / management / R & D / financial expenses is 1.1%, 7.4%, 5.9%, 0.7%, respectively, compared with the same period last year,-0.01/+0.07/+1.62/+0.16pct, the R & D expenses are + 20.7% compared with the same period last year, and the sales and management expenses are lower than the same period last year. The proportion of impairment expenses to income is from + 2.2pct to 2.2% compared with the same period last year. Under the combined influence, the net interest rate of 9M23 is 7.5%, 5.9% for Q3 in a single quarter, year-on-year + 2.0pct, and month-on-0.63pct.

The operating cash flow is improved compared with the same period last year. The increase in advance payment is expected to improve the operating net cash flow of 9M23-90 million yuan, + 50 million yuan year-on-year, and the net 23Q3 is 100 million yuan, + 120 million yuan year-on-year. This is mainly due to the significant increase in cash-to-cash ratio and the decline in cash-to-cash ratio, with a cash-to-cash ratio of 116.5%, 106.6%, and + 7.5/-11.8pct. At the end of 9M23, the company's notes receivable and accounts receivable / contract assets / notes payable and accounts payable / contract liabilities were 6.610 million yuan, respectively, which was higher than that of + 0.1 pound at the end of 22 years, and higher than that at the end of 22 years and 0.11 billion yuan at the end of 23H1. 9M23 final interest-bearing liability ratio / asset-liability ratio 5.0% Universe 47.1% year-on-year + 0.5/-0.8pct.

Food security plus cold chain enhanced two-wheel drive, driven by food security in the medium and long term, granary construction has ushered in a peak period, grain and oil processing intensification has continued to improve, while cold chain logistics demand is improving, and it is expected that the 14th five-year Plan will maintain rapid growth. In June 2023, the National Construction Plan of Modern Facility Agriculture (2023-2030) was issued, requiring the completion of a total of 60, 000 storage and fresh-keeping facilities by 2030, as well as the continuous transformation and upgrading of a number of old grain drying centers (sites). We believe that as a pioneer in the field of grain and oil engineering and backed by Cofco, the company has a strong competitive advantage among customers of downstream state-owned enterprises. The newly signed orders in 22 years are + 39.6% compared with the same period last year, and are expected to benefit from the food security strategy during the 14th five-year Plan period. superimposed own business extends to the industrial chain, and the development path is clear.

Risk hint: the investment in grain and oil field is not as expected; the conversion rate from design to mechanical and electrical engineering is not as expected.