Event: The company released its 2023 three-quarter report: 23Q3 revenue of 207 million yuan, yoy -2.5%, qoq +8.2%; return 0.
5.3 billion yuan, YOY -21.6%, QoQ -7.0%; deduction of 53 million yuan, YOY -20.7%, QoQ +0.1%. Gross profit margin 55.3%, yoy-2.8pct, q+0.2pct; net profit margin 27.2%, yoy-7.0pct, q-4.5pct.
Q3 Downstream demand is recovering slowly, and new products continue to be launched: Currently, the company's revenue mainly comes from the fields of lasers and optical communications. Downstream recovery has been flat since this year, and demand from customers outside Shanghai has declined, leading to a year-on-year decline in the company's revenue and profit. However, on the other hand, the company actively invests in new product research and development to seize future growth opportunities. At the end of 2022, it was established until the end of 2022 to deploy ultra-precision optical components. This year, it also continued to launch new products in the fields of laser devices and optical communications, supplying leading international manufacturers.
Employee shareholding strengthens incentives and invests in stocks to promote new product research and development: On 9/28, the company announced that at the end of the period, Photonics plans to introduce Yuanzhi Spark as a strategic shareholder. Yuanzhi Spark will hold 37.04% of the shares after entering the shares. After penetration, the shareholder behind it is the Shenzhen State-owned Assets Administration Commission.
Furthermore, in July of this year, Photonics introduced an employee shareholding platform (as far as Spark holds about 17.2% of shares after investing) to strengthen internal team incentives. With the establishment of a shareholding platform for employees, as well as Yuanzhi Spark's investment and resource introduction, the company's new product development and marketing in the field of ultra-precision optical components is expected to accelerate.
Investment advice: We expect the company's net profit to be 2.3/29/360 million yuan in 2023-25, corresponding to PE of 47/38/30 times, maintaining the “buy” rating.
Risk warning: Risk of declining laser market sentiment; growth of the optical communication industry falling short of expectations; new product development falling short of expectations; risk of information not being updated in a timely manner.