Performance summary: the company achieved an operating revenue of 4.713 billion yuan in the first three quarters of 2023, with a year-on-year growth of 52.85%; The net profit attributable to the parent company was 211 million yuan, up 62.48% year on year; The net profit not attributable to the parent company was 189 million yuan, up 79.37% year on year. The company's performance meets the previous performance forecast expectations.
23Q3 shipment continued to increase month on month, with a slight decline in gross profit rate. The company's 23Q3 shipment volume continued to increase month on month, with a single quarter operating revenue of 1.893 billion yuan, up 83.03% year on year and 20.14% month on month. In 23Q3, the company's comprehensive gross margin was 12.81%, a slight decline of 0.40pp month on month. The decline in gross profit margin was mainly due to the pilot production of 50000 tons of aluminum components for the first phase of the new energy vehicle project in the middle of June. 23Q3 company actively promoted the sample delivery verification, factory audit and other related work, with high initial fixed costs. In 23Q3, the company's period expense rate was 7.40%, 0.87pp lower than that in 23Q2. In addition, the 23Q3 Company accrued a credit impairment loss of 15.24 million yuan, adding back asset impairment losses, and deducted a net profit of 96.99 million yuan not attributable to the parent company, up 18.86% month on month. The growth rate basically matched the growth rate of revenue.
The layout of production capacity in Southeast Asia is expected to earn excess profits. In order to develop overseas markets and meet the needs of the company's international development strategy, the company plans to build 120000 tons of aluminum frame capacity and 120000 tons of recycled aluminum capacity in Vietnam and Malaysia, and the overseas factories are expected to be put into production in the second half of 2024. Longji Green Energy, Jinko Energy, Jingao Technology, Trina Solar, Dongfang Risheng and other head component manufacturers all have component capacity in Southeast Asia. At present, Vietnam's component capacity is about 50GW, with huge market space. The company has built a production base in Southeast Asia, which can support the production capacity of nearby component factories. Due to the high premium of overseas component sales, auxiliary materials are also expected to earn excess profits compared with domestic ones.
The second growth curve is expected to be scaled up after the new energy vehicle project was designated. Xinbo New Energy, a subsidiary of the company, recently received the notice of vehicle model designation from some domestic customers, providing customized development and delivery of battery housing, sill beam, extended range transfer aluminum bracket and front compartment frame beam for the above customers. The 50000 ton project of the first phase of the new energy automobile aluminum parts project has steadily climbed, and the equipment order of the 50000 ton project of the second phase has been issued. It is expected that Q3 will arrive at the factory for installation and commissioning, and Q4 will be put into production. The profit of the battery tray is higher than that of the photovoltaic aluminum frame. Next year, 100000 tons of capacity will be put into production, which will become the second growth curve of the company and help the performance soar.
Profit forecast and investment suggestions. The company's shipments continued to improve month on month, and its performance maintained a rapid growth year on year. The company has obtained the fixed point of new energy automobile aluminum component project, and the aluminum component products such as battery tray will be gradually expanded, becoming the new growth curve of the company. The upstream layout of recycled aluminum projects will further reduce costs and increase efficiency, and improve profitability.
It is estimated that the company's net profit attributable to the parent company from 2023 to 2025 will be 336 million yuan, 596 million yuan and 919 million yuan respectively, and the corresponding PE will be 14.6, 8.2 and 5.3 times respectively. In combination with the industry average valuation level, maintain the "buy" rating.
Risk tip: the price of aluminum ingots rises rapidly, the aluminum frame is replaced by other products, and the construction of new capacity and production progress is not as expected.
