Overview of events
Zhiyang Innovation released its 2022 semi-annual report on August 22. 2022H1 achieved a revenue of 313 million yuan, an increase of 32.16% over the same period last year, a net profit of 17 million yuan, a decrease of 27.30%, and a non-return net profit of 15 million yuan, down 20.53%.
The epidemic affected short-term performance under pressure. After the total disturbance, net profit continued to increase. 2022H1 achieved revenue of 313 million yuan, an increase of 32.16% over the same period last year, and revenue of 189 million yuan in the second quarter alone, down 7.42% from the same period last year. The main departments are: 1) the national smart grid and power Internet of things strategy continues to advance, and the market demand for intelligent operation and maintenance management of transmission lines increases; 2) due to the impact of the epidemic in the second quarter, the company's order confirmation has been delayed. On the profit side, 2022H1 achieved a net profit of 0.17 million yuan, down 27.30% from the same period last year, and 1.4 million yuan in the second quarter, down 94.63% from the same period last year. The main departments are: 1) the implementation of the equity incentive plan, the impact of share payment is 4.5 million yuan; 2) the epidemic affects delivery, with an impairment loss of 5.9 million yuan and an early investment of 7.3 million yuan. After adding back the disturbance, 2022H1's net profit increased by 47% year-on-year, in line with expectations. Looking to the future, in the short term, the company's business delivery delay superimposed power grid business income is confirmed to account for a relatively high proportion in the second half of the year, and the company's H2 performance is expected to improve significantly; in the long run, on the one hand, the company's power sector business takes advantage of the booming wind of grid investment to accelerate development; on the other hand, the company actively distributes rail transit, water conservancy, emergency management, new energy and other areas, is expected to explore new growth points.
Attach importance to R & D investment, a number of core technologies have landed
2022H1 continued to invest in research and development, with an R & D expenditure rate of 11.7%, an increase in 0.55pct compared with the same period last year, with 15 new invention patents, 18 utility model patents and 14 copyrights. At the same time, the reserved part of the stock incentive plan was granted, covering 119 core employees. Specifically, 2022H1 has completed the research and development of core technologies in many fields, including power patrol image hidden danger detection algorithm, data mining analysis technology based on transmission channel hidden dangers, intelligent factory early warning platform, wind power panoramic intelligent monitoring system v1.0 and other core technologies.
The electric power industry has maintained a high boom, and water conservancy, new energy and other new fields have made the first breakthrough in the electric power industry. during the 14th five-year Plan period, the total investment of the two networks reached 3 trillion yuan, an increase of 17% over the same period last year. We estimate that the proportion of intelligent investment is expected to reach 14%. The investment exceeded 400 billion yuan. At the same time, during the 14th five-year Plan period, the national network plans to build UHV "24 AC and 14 DC", involving more than 30,000 km of lines, and plans to retrofit 7700 new intelligent substations. We estimate that the static space of the intelligent operation and maintenance market is about 70 billion yuan, the transmission side is about 30 billion yuan, the substation side is about 10 billion yuan, and the distribution room is about 30 billion yuan. New layout industry, the company relies on its own technology and other advantages to actively layout rail transit, water conservancy, emergency management, new energy and other fields, including intelligent water conservancy early warning system, intelligent chemical hazard safety production management system, wind farm intelligent inspection system and other landing products. From the point of view of the order, 2022H1, the company has landed the order in all new fields, and also completed the first order revenue recognition in the field of water conservancy and new energy; at the same time, in February 2022, the company successfully entered the 2022 list of qualified suppliers of materials of China Railway electrification Bureau Group Co., Ltd.
Investment suggestion
Zhiyang innovates and ploughs the field of intelligent operation and maintenance of electric power for many years. On the one hand, it has accumulated superb technology and rich experience in operation and maintenance, realizing the full coverage of intelligent operation and maintenance products of transmission and distribution transformation, on the other hand, it continues to actively explore in new fields to find new performance growth points in the future. We expect the company to achieve revenue of 9.5%, 1.38%, 1.95 billion yuan respectively from 2022 to 2024, an increase of 44%, 47%, 42%, and a net profit of 1.1%, 170%, 250 million, an increase of 59%, 51%, 46%, and maintain a "buy" rating.
Risk hint
1) R & D breakthroughs fall short of expectations; 2) policy support falls short of expectations; 3) project delivery falls short of expectations.
