Key points of investment
The company achieved operating income of 1,051 billion yuan in the first three quarters of 2023, +19.41% year-on-year; net profit to mother of 37.3573 million yuan; and net profit of non-return to mother of 32.1426 million yuan. The 23Q3 quarter achieved operating income of 348 million yuan, +34.58% year-on-year; net profit to mother of 5,013,900 yuan; net profit of non-return to mother of 3.5938 million yuan.
Steady growth in traditional sectors+rapid growth in new fields, building excellent Q3 revenue performance. On the basis of steady growth in sales revenue in traditional fields such as refrigeration, HVAC, power and electricity, the company achieved significant revenue growth in new fields such as electronics and new energy vehicles, which jointly promoted the company's Q3 revenue of 348 million yuan, +34.58% over the same period last year.
Continuing to vigorously expand customers in the NEV and electronics sectors, the new sector's revenue is expected to continue to grow rapidly in the NEV sector. The company is currently a solder supplier for HVDC relay leader Hongfa Co., Ltd. and BYD's power battery ceramic seal supplier Meicheng Ceramics. As the company actively expands new customers in the future, revenue in the NEV sector is expected to continue to grow rapidly. In the electronics sector, in 2023, the company used solder paste as a strategic project to actively promote new product development and expand new customers. It has passed core customer certification in the fields of communications, smart home appliances, photovoltaics, security, etc., and the company's revenue in the electronics sector is expected to continue to increase in the future with the gradual increase in subsequent customers.
Accelerating the internationalization strategy, overseas markets are expected to continue to contribute incremental revenue. On the basis of deep roots in the Asia-Pacific market, the company explores market opportunities in North America, Europe, the Middle East, etc., actively expands the overseas refrigeration industry chain, power, electricity, electronics and other industries, and promotes mature products to the international market. With the gradual expansion of the company's overseas customers and the continuous improvement of channels, overseas business is expected to continue to contribute incremental revenue.
Profit forecasting and valuation
The overall revenue for 2023-2025 is expected to be 1,522/20.37/2,618 billion yuan, respectively, with growth rates of 24.74%/33.78%/28.55%, and net profit to mother of 0.50/0.91/142 million, respectively, with growth rates of 479.01%/79.35%/56.67%, respectively, corresponding EPS of 0.57/1.02/1.60 yuan, respectively. Maintain a “buy” rating.
Risk warning
Downstream demand from new businesses such as new energy vehicles and electronics falls short of expectations; overseas market expansion falls short of expectations; and there is a risk of fluctuating raw material prices.