Summary of events: the company released its semi-annual report of 2022 on August 18. 2022H1, the company achieved operating income of 3.203 billion yuan, year-on-year + 11.19%, and net profit of 702 million yuan, + 114.61%, which was in line with the previous company performance forecast range. From a quarterly point of view, 2022Q2, the company achieved operating income of 1.822 billion yuan, year-on-year + 20.25%, home net profit of 420 million yuan, + 82.49% year-on-year.
The growth rate of operating income is stable, and the net profit of returning home has achieved high growth compared with the same period last year. On the revenue side, 2022H1 achieved operating income of 3.203 billion yuan, + 11.19% year-on-year, slowing compared with 2021H1's revenue growth rate of 24.28% year-on-year. In terms of products, the income of superhard materials and their products / special vehicles / auto parts / special equipment was + 18.30%, 42.24%, 17.47%, 16.84%, respectively, and accounted for 50.06%, 3.80%, 4.35%, 41.79%, respectively, of which superhard materials and their products and special equipment contributed the main operating income. The growth of its revenue has led to a steady increase in the company's revenue. On the profit side, or due to the booming production and sales of diamonds and industrial diamonds, 2022H1's net profit is + 114.61% compared with the same period last year.
During this period, the expense rate was well controlled, and the optimization of product structure led to the improvement of profitability. In terms of expense rate, 2022H1, the company's sales period expense rate is year-on-year-1.19PCT to 10.43%, sales expense rate / management expense rate / R & D expense rate / financial expense rate is respectively year-on-year-0.17PCT/-0.55PCT/+0.11PCT/-0.58PCT to 0.83%, 6.03%, 4.91%, 1.34%. In terms of profitability, benefiting from the magnificent demeanor of the superhard material industry, 2022H1, the company's sales gross margin and net sales margin are + 11.08PCT, + 10.55PCT to 36.23% and 21.90%, respectively. From a product point of view, the gross profit margin of the company's superhard materials and their products and special equipment manufacturing industry is + 18.34%, 2.67% to 54.73% and 20.64%, respectively.
The production and operation of special equipment is stable and controllable, and the profitability of 2022H1 is improved. 2022H1, the company's special equipment business income increased from + 16.84% to 1.339 billion yuan compared with the same period last year, and its proportion in the main business income increased to 41.79%, or because the company firmly implemented the requirements of "immediate production and delivery", the equipment production and operation was stable and controllable, and the gross profit margin of special equipment rose steadily, which led to the improvement of the company's profitability to a certain extent.
The prosperity of the superhard material industry continues to be high, and the booming production and marketing lead to the high performance of the company. On the one hand, according to GJEPC data, from January to July 2022, India's imports of cultivated diamond blanks ranged from + 63.7% to US $1.008 billion, while exports of bare diamonds ranged from + 72.7% to US $1.007 billion. The import and export data of Indian mid-stream cultivated diamonds further confirmed the magnificent nature of the nurtured diamond industry. On the other hand, most of the new production capacity of the superhard material industry is invested in the cultivation of diamond production, resulting in a decline in the supply of industrial diamond, while the downstream traditional demand is relatively rigid and stable. The rapid development of the downstream photovoltaic industry has led to an increase in demand for diamond powder. As a leader in superhard materials, the company's revenue and performance are expected to continue to benefit.
Investment suggestion: the company is expected to achieve operating income of 91.86,109.58 and 12.988 billion yuan respectively from 2022 to 2024, which is + 22.3%, + 19.3% and + 18.5% respectively, and the net profit is 12.98,17.52 and 2.187 billion yuan respectively. Year-on-year + 167.4%, + 35.0% and + 24.8% respectively To achieve EPS0.93, 1.26 and 1.57 yuan, August 18 closing price corresponding to PE is 39, 29 and 23 times, maintaining the "recommended" rating.
Risk tips: industry demand is lower than expected, competition pattern deteriorates, raw material prices fluctuate, and so on.