1H21 performance meets the forecast
The company announced 1H21 results: revenue was 1.236 billion yuan, unchanged from the same period last year; net profit from home was 67 million yuan, reversing losses, in line with previous performance forecasts; in a single quarter, 2Q21 realized revenue of 761 million yuan, down 15% from the same period last year, and net profit from home was 35 million yuan, down 53% from the same period last year.
The double main business has grown steadily and its profitability has improved significantly. 1H21's track business revenue was 1.084 billion yuan, up 33% from the same period last year, while pan-semiconductor business revenue was 150 million yuan, up 50% from the same period last year. In addition, the environmental protection business that has now been spun off earned 320 million yuan in the same period last year. 2021 the company's comprehensive gross profit margin increased by 0.8ppt to 30.3% compared with the same period last year, of which the gross profit margin of the rail transit business increased by 3.3ppt to 32.2% year-on-year, the gross profit margin of the semiconductor business increased sharply to 41.9% year on year, the expense rate increased, and the net profit rate decreased. The rate of R & D and financial expenses of 2Q21 increased by 2.2/2.4ppt compared with the same period last year, and the net profit margin decreased by 3.7ppt to 4.6%. The advanced net outflow of business activities of the company was 145 million yuan, and the net outflow was 119 million yuan more than the same period last year.
Development trend
There has been a marked increase in the number of newly signed orders in the rail transit business. The newly signed order for 1H21's rail transit business was 1.465 billion yuan, an increase of 425% over the same period last year, of which the signal system, automatic ticket inspection and line network sorting system and system integration business were each 10.29max 0.76 / 355 million yuan. In particular, Shaoxing Line 2 is the autopilot signal system project, which is the company's third GOA4 level full automation project.
The semiconductor business will be expanded as scheduled, and it is proposed to increase the construction of low-cost monocrystalline silicon production capacity. 1H21's revenue from polishing and polishing wafers was 0.74.034 billion yuan, and the proportion of polishing revenue increased by 5.5ppt to 23% compared with the same period last year. In addition, the proportion of sales of heavily mixed products by the company increased by 9.2ppt to 39% compared with the same period last year. In order to increase production capacity and reduce costs, the company plans to invest no more than 520 million yuan to build a large-size semiconductor silicon single crystal production base with an annual production capacity of 750t 6-8 inch semiconductor silicon and conduct 12-inch product research and development. In particular, the electricity price in the central region has obvious advantages over Jiangsu and Zhejiang, and we expect the project to help increase monocrystalline silicon production capacity and reduce production costs.
Profit forecast and valuation
We maintain the 2021 / 2022 EPS forecast of 0.33 USD 0.41. The company's current share price corresponds to 20.2 times of 2021 / 2022 25.0 pound, considering that the semiconductor business has a good volume prospect, we raise the target price by 15% to 9.51 yuan, corresponding to 2923 times of 2021 / 2022, there is 15% upside space. Maintain an industry rating that outperforms.
Risk
The downstream bidding of rail transit is not as expected; the volume of semiconductor business is not as expected.