23Q3 revenue/net profit attributable to parent +41.2%/+352.2% year-on-year, maintaining "buy"

The company issued a quarterly report for 23 years: 9M23 realized a net profit of 43.5/100 million yuan from revenue/parent,+10.8%/-29.0% year-on-year, and a net profit of 16.4/0.2 billion yuan from Q3 revenue/parent,+41.2%/+352.2% year-on-year. It is expected that the revenue of the two major sectors of display and new materials will increase. Considering that the company's short-term gross profit margin is still under pressure, Adjust the parent net profit of 23-25 years to 1.5/2.7/370 million yuan (previous value: 1.7/2.8/390 million yuan), CAGR+38.8% in 23-25 years, which is 1.2 times of the PEG average expected by Wind in 24 years of the Company. Considering that the new products such as high-purity quartz sand and UTG of the Company have high scarcity but short-term profitability pressure, the Company will be given 1.3 times PEG in 24 years, and the target price will be 14.23 yuan, maintaining "buy".

23Q3 revenue increased significantly, gross profit margin continued to decline month-on-month

23Q3 company revenue of 1.64 billion yuan, year-on-year +41.2%, we expect the display and new materials two major sectors revenue growth, of which consumer electronics demand is expected to pick up or drive the company display sector revenue recovery growth. 9M23 gross profit margin 12.7%, year-on-year-3.5pct; 23Q3 gross profit margin 11.7%, same/month-on-month-4.0/-2.1pct, we expect that on the one hand, the gross profit margin of new material business will decrease due to price decline, on the other hand, the relatively low gross profit margin shows that the proportion of business income will increase. Looking ahead to Q4, we expect the company to show that business revenue is expected to continue to recover, sales of new materials business may remain stable, and high value-added products such as high purity quartz sand are expected to contribute more profits.

9M23 period expense ratio is-0.8pct year-on-year, Q3 operating net cash flow pressure 9M23 company period expense ratio is 11.1%, year-on-year-0.8pct, among which sales/management/R & D/financial expense ratio is 1.9%/4.5%/3.8%/1.0% respectively, year-on-year-0.05/+1.2/-1.2/-0.7pct, the decrease of financial expense ratio is mainly expected to be the increase of exchange income. At the end of Q3, the asset-liability ratio of the Company was 58%, which remained stable year-on-year. 9M23 Company's operating net cash flow was RMB 160 million yuan, year-on-year + RMB 30 million yuan;23Q3 operating net cash flow was RMB-50 million yuan, year-on-year-RMB-130 million yuan, mainly due to the year-on-year cash-to-cash ratio of-38pct.

Consumer electronics industry chain is expected to pick up, expect UTG and high-purity quartz sand projects put into production According to Canalys, 23Q3 global smartphone shipments only fell by 1% year-on-year, the decline narrowed for three consecutive quarters, driven by new machine goods, consumer electronics industry chain demand is expected to pick up, the company as a domestic display module leading enterprise, and accelerate to enter the new energy vehicle module market, is expected to fully benefit from the industry demand recovery and intelligent development of automobiles. At the same time, the company has a full set of UTG production technology of "original film formula development, original film production, UTG thinning, UTG molding and flexible lamination", which is expected to benefit from the demand for folding screen products in the future. Looking forward to 24 years, the company's two core projects, UTG Phase II and synthetic high-purity quartz sand, are expected to be gradually put into production, bringing new growth points to the company.

Risk hint: the demand for folding screen is not as expected, the construction of UTG production line is not as expected, and the product iteration risk.