Event: the company released its third quarterly report for 2022. In the first three quarters, the company realized revenue of 674 million yuan, an increase of 95.97%, and a net profit of 350 million yuan, an increase of 117.25%. Of this total, 2022Q3 achieved a revenue of 227 million yuan, an increase of 80.09%, and a net profit of 111 million yuan, an increase of 108.85%.
Revenue side: the company achieved revenue of 674 million yuan in the first three quarters of 2022, an increase of 95.97%, mainly due to the continuous growth of production capacity and strong market demand. On a quarter-by-quarter basis, 22Q1/Q2/Q3 achieved revenue of 1.92 million yuan, respectively, with an increase of 126.88%, 91.40% and 80.09% respectively.
Gross profit margin: the company's gross profit margin in the first three quarters of 2022 was 65.01%, with an increase of 1.96pct. From a quarterly point of view, the gross profit margin of 22Q1/Q2/Q3 is 69.17%, 67.50%, 58.69%, respectively, compared with the same period last year + 5.38/+1.39/-0.62pct.
Expense side: the expense rate during the first three quarters of 2022 is 5.12%, which is the same as minus 4.23pct. Among them, the ① sales expense rate is 0.75% and minus 0.53pct; the ② management expense rate is 1.63%, minus 0.86pct; the ③ R & D expense rate is 4.59%, minus 0.24pct; and the ④ financial expense rate is-1.85%, with the same minus 2.60pct, mainly due to the increase in interest income and exchange gains and losses.
Profit side: the company achieved a net profit of 350 million yuan in the first three quarters of 2022, an increase of 117.25%; the net interest rate was 51.89%, with an increase of 5.08pct. From a quarterly point of view, 22Q1/Q2/Q3 achieved a net profit of RMB 1.01 billion, respectively, an increase of 147.81%, 105.34%, and 48.89%, respectively, and an increase of 4.46/3.66/6.73pct, respectively.
Cash flow side: the company realized net cash flow of 3.984 billion yuan in the first three quarters of 2022, an increase of 1485.27%. Of this total, the net cash flow from operating activities was 260 million yuan, an increase of 103.07%, mainly due to income growth and good payback; the net cash flow from investment activities was-360 million yuan, an increase of 76.66%, mainly due to the company's increased investment in fixed assets; the net cash flow from fund-raising activities was 4.083 billion yuan, an increase of 1149.52%, mainly due to the issuance of new shares.
Investment suggestion: the company has gradually made breakthroughs in technology, gradually improved the rate of superior products and the proportion of large particles, and has outstanding production efficiency and cost advantages. at the same time, it has been approved to increase the registration application, and it is concentrating on completing the construction of the new plant in 2022, rapidly expanding the scale of production capacity. it is expected that the number of presses will exceed 1000 by the end of the 22nd, and it will maintain a long-term leading position in the industry by virtue of technological progress and capacity expansion. At the same time, the company is actively promoting the layout of the retail end. It is expected to fully enjoy the dividend of the whole industry chain of the diamond industry. Taking into account the smooth progress of the company's fixed growth and the good state of sales payback, we have raised the company's 22-24 net profit to 9.1 billion yuan respectively (the previous value is 7.5 trillion yuan), and the corresponding PE is 31x/17x/11x, which is continuously recommended.
Risk hints: capacity expansion is less than expected, risk of price fluctuation, intensified market competition, recurrent risk of epidemic, etc.