Event: the company released its Triple report for 2023. In the first three quarters of 2023, the company achieved revenue of 395 million yuan, down 6.41% from the same period last year; net profit of 35.22 million yuan, up 375% from the same period last year; and net profit of 15.43 million yuan, up 181% from the same period last year. 2023Q3, the company achieved revenue of 151 million yuan in a single quarter, an increase of 14.22% over the same period last year, an increase of 8.94% over the same period last year, and a net profit of 15.33 million yuan, an increase of 452% and 125% over the same period last year.

Gross profit margin repair overlay cost control, 23Q3's operating performance increased significantly compared with the previous month. Over the past 23 years, the company's PCB photoresist products have developed steadily, the consumer electronics coating business has gradually stabilized, new products in the field of solar photovoltaic materials such as photovoltaic insulating glue have been released one after another, superimposed by the decline in the price of upstream raw materials, and the company's gross profit margin has continued to improve quarter by quarter. 23Q3, the company's single-quarter gross profit margin rebounded to 34.9%, a year-on-year increase in 9.8pct and a month-on-month increase in 2.8pct. In addition, in the first half of 2023, the company disposed of Shanghai Chuangxing and other loss assets and restricted assets, and implemented measures to reduce costs and increase efficiency on the existing operating base, which effectively improved the overall expense rate of the company and strengthened the overall strength of the company. 23Q3, the company's sales expense rate is 7.5%, which is lower than the same period last year, and 0.6 pct lower than the previous year; the management expense rate is 10.1%, which is basically the same as the previous year's 2.4pct reduction.

Launch the equity incentive plan, bind the interests of the core members of the company, and stimulate the endogenous power. In September, 23, the company launched the 2023 restricted stock incentive plan, which intends to grant 1.5 million restricted shares to 38 directors, senior managers and core technical / business personnel, corresponding to the grant price of 7.79 yuan per share. The corresponding performance evaluation target is operating income or net profit for 23-25 years (one of the two can be satisfied), in which the revenue assessment target is to reach 100 million yuan in 5-6-7 in 23-25 years, and the net profit assessment target is to reach 350 million million yuan in 23-25 years. The equity incentive plan can effectively bind the interests of the core members of the company and stimulate the work motivation of the core staff.

We will speed up the construction of Longnan base and lay out new products in the field of photovoltaic and new energy vehicles. The company's planning and construction in Longnan base has a capacity of 38,000 tons / year for all kinds of photoresist and 120,000 tons / year for resin. It is estimated that some products will reach the trial production conditions in 2023. In the field of photovoltaic, in addition to the photovoltaic insulating adhesive products mentioned above, the research and development of photovoltaic photovoltaic adhesive products is being carried out in an orderly manner. It is in the process of docking, sending samples and testing with a number of head solar photovoltaic module enterprises and related equipment enterprises. In the field of new energy automotive coatings, the products of Jiangsu Hongtai, a subsidiary of the company, can be used in lamp wheels, PC surface hardening treatment, non-metallic internal and external decoration painting and so on. At the same time, the company's automotive paint products have also entered BYD, Geely, BAIC, Changan and other terminal mainframe plants.

Earnings forecast, valuation and rating: the company's 23Q3 performance is in line with expectations and maintains profit forecasts. It is estimated that the 23-25 year net profit of the company will be 0.45 yuan, 0.70 billion yuan, respectively, maintaining the company's "overweight" rating.

Risk hint: production capacity construction is not as expected, downstream demand is not as expected, product research and development risk, product verification risk, product new application field breakthrough is not as expected.