Eston announced in the third quarter report of 2023 that it achieved revenue of 3.226 billion yuan in the first three quarters, an increase of 26.88% year-on-year. Net profit returned to the mother was 140 million yuan, an increase of 16.64%. Although the growth rate in the third quarter was under pressure, the gross margin and period expense ratio remained stable. The company’s industrial robot shipments in the domestic market ranked second in the first three quarters, and the market share continued to rise.

In the case of pressure on the domestic industrial robot market, Eston bucked the trend and shipped more than 17,000 units, an increase of 41% year-on-year. Although the company’s net profit growth in the first three quarters was slightly lower than expected, taking into account the company’s performance, the company was given an “overweight” investment rating. The company’s gross profit margin and period expense ratio in the first three quarters were basically flat, with gross profit margin of 33.12%, down 0.25 percentage points year-on-year, and net profit margin of 4.50%, down 0.54 percentage points year-on-year. Q3 single quarter revenue of 984 million yuan, an increase of 11.01%; Net profit returned to the mother was 43 million yuan, down 2.47% year-on-year. In the first three quarters, gross profit margin and period expense ratio remained stable, of which the sales revenue of automation core components and motion control systems increased by 2.82% year-on-year.

According to MIR data, the overall sales of domestic industrial robots in the first three quarters fell 0.1% year-on-year, and Eston’s market share reached 8.37%, ranking second only to Fanuc. Considering the company’s outstanding first-mover advantage and will continue to benefit from machine replacement and domestic substitution, we give Eston an “overweight” investment rating. The corresponding PE values are 65.4/41.5/25.1 times.

Although the growth rate in the third quarter was under pressure, the company’s market share continued to rise, which shows that the company’s products are competitive in the market. With the acceleration of domestic substitution, Eston will continue to gain market share. Although the company’s net profit growth was slightly lower than expected, considering the performance of the overall market, the company has performed well in this market and deserves continued attention from investors.