This report is read as follows:
The company's Q2 performance has declined slightly under the impact of the epidemic, and it is expected that the performance will pick up quickly with the substantial release of production capacity and the epidemic link, and maintain good growth throughout the year.
Main points of investment:
The performance is slightly lower than expected and the overweight rating is maintained. The company's 22H1 performance was slightly lower than expected by the epidemic in April and May, but considering that 22H2 will significantly release production capacity to promote performance growth, the EPS in 2022-24 will be 1.01,1.34,1.63 yuan respectively, maintaining the target price of 19.77 yuan, increasing holdings.
The epidemic affected the company's income growth and gross profit margin, and the net profit margin remained at a good level. 22H1 revenue 1.75 billion / + 17.7%, home net profit 180 million / + 13.5%, gross profit 17.5%/-4pct, net profit 10.4%/-0.4pct. Among them, Q2 income is 860 million /-3.5%, net profit is 80 million /-7.2%, gross profit is 16.8%/-3.5pct, net profit is 9.27%/-0.3pct. In the context of the decline in gross profit, the company ensures the net interest rate through better cost control ability.
The performance of construction machinery parts is eye-catching, and the new production capacity will be released quickly in the second half of the year. The company's 22H1 compressors, construction machinery and auto parts achieved revenue of 790 million / + 7.8%, 380 million / + 47.9% and 250 million / + 8%, respectively. In recent years, the company plans to invest more than 1 billion to improve casting and machining capacity, and the 22-year plan for commercial vehicle braking system special line, short process co-casting and other projects have entered the stage of commissioning and trial production. Compressor pump assembly, flanges, cylinders and power insulators are also expected to reach production in the second half of the year, which is expected to promote the growth of compressor and automobile business.
The recovery of the epidemic brings demand elasticity, which is rooted in Shanxi to build manufacturing barriers. Affected by the epidemic in Shanghai in April and May 22, the lower-than-expected delivery of automobile and compressor parts has affected revenue and gross profit margin. Considering that demand has returned to normal in June, various businesses are expected to achieve substantial growth in the second half of the year. At present, the company has built economies of scale, energy prices, labor costs and other advantages in Shanxi, while constantly improving casting and machining production capacity, the competitiveness of the industry has been enhanced year by year.
Risk tips: macroeconomic decline, high customer concentration, rising raw materials