Event: on July 29, 2022, the company released its semi-annual report of 2022, with a total operating income of 1.746 billion yuan in the first half of the year, an increase of 17.72% over the same period last year, and a net profit of 180 million yuan belonging to shareholders of listed companies, an increase of 13.45% over the same period last year.
Main points of investment:
The high base number of 21Q2 in the same period + 22Q2 epidemic disturbance, the short-term pressure on the reported performance. In the first half of 2022, the company achieved a total operating income of 1.746 billion yuan, an increase of 17.72% over the same period last year, and the net profit attributed to shareholders of listed companies was 180 million yuan, an increase of 13.45% over the same period last year. Q2 realized revenue of 861 million yuan in a single quarter, down 3.51% from the same period last year. The net profit reached 80 million yuan, down 7.21% from the same period last year, and the growth rate of both Q1 income and performance turned negative compared with 2022. The main reason is:
1) in April 2021, the company has listed Jinyuan Industries, and the revenue base of Q2 in the same period last year was relatively high; 2) in 2022, the Q2 epidemic repeatedly disrupted the normal production and operation rhythm of downstream enterprises, and most of the company's customers were in East China. The overall business is greatly affected by the epidemic.
The short-term disturbance of the epidemic has affected zero business, benefiting from soaring energy prices in Europe and continued high growth in construction machinery business. From a business point of view:
1) Compressor parts business: according to the online data of the industry, the sales of 2022H1 rotor compressors reached 130.55 million, down 2.0% from the same period last year. From January to May 2022, the sales of refrigerator fully sealed piston compressors reached 101.829 million, down 7.4% from the same period last year. At the company level, the revenue of 2022H1 compressor parts reached 785 million yuan, an increase of 7.8% over the same period last year. We expect Q2 to be basically the same in a single quarter. 2) Construction machinery parts business: the company's construction machinery parts business is mainly export-oriented, the main competitors are mostly in Europe, the casting industry is a high energy-consuming industry, and electricity charges have a great impact on the overall profitability. The sharp rise in electricity prices in Europe since the beginning of this year has made it impossible for European suppliers to carry out normal production, and the company has benefited from obtaining high supply orders from overseas customers. The revenue of construction machinery parts of 2022H1 Company reached 383 million yuan, an increase of 49.7% over the same period last year. 3) Auto parts business: the company's customers are mainly located in eastern China. Q2 is affected by the corresponding policies of the epidemic, and the production pace of downstream customers slows down. The company's 2022H1 zero business revenue increased by 8.0% compared with the same period last year, of which we expect Q2 to decline by 20% and 30% year-on-year. 4) pig iron and renewable resources business: 2022Q2 has opened a downward channel for commodity prices. Taking into account the possibility of a decline in the price of finished products produced by high-priced raw materials and the demand for maintenance, the company shut down in May, and we expect Q2 single-quarter revenue to decline by 30% compared with the same period last year.
Profit forecast and investment rating. The company's Q2 operation was affected by the epidemic in the short term, and we correspondingly lowered our profit forecast. It is estimated that the net profit from 2022 to 2024 will be 4.2710 million yuan (the previous value is 727,957 million yuan), an increase of 30.3%, 39.1% and 34.7% respectively over the same period of last year. Considering that the downstream steam zero customers have gradually returned to normal operation, the impact of short-term disturbance has been gradually eliminated, the construction machinery business continues to be high, and the production capacity of superimposed projects has been released one after another, the overall operation of the company is expected to continue to improve, corresponding to 2022-2024 PE is 17 times, 12 times and 9 times, currently still has a high performance-to-price ratio, to maintain the "buy" investment rating.
Risk hint: exchange rate fluctuation risk; raw material price fluctuation risk.