The company released the semi-annual report of 2022: 1) 2022H1: the company realized operating income of 3.203 billion yuan / + 11.19%, net profit of 702 million yuan / + 114.61%, and non-net profit of 679 million yuan / + 120.25%. 2) single Q2: the operating income is 1.822 billion yuan / + 20.25%, the net profit is 420 million yuan / + 82.49%, and the non-net profit is 400 million yuan / + 85.75%.
With the rapid growth of superhard materials, the business of special equipment has turned a loss into a profit. In terms of business segment, 22H1 superhard materials and products business achieved revenue of 1.604 billion yuan / + 18.30%, accounting for 50.06%/+3.00pcts, gross profit margin + 18.34pcts to 54.73%, net profit of 680 million yuan / + 98.69%; special equipment business revenue of 1.339 billion yuan / + 16.84%, gross profit margin of + 2.67pcts to 20.64%, net profit of 110 million yuan (- 30 million yuan in the same period last year), turning losses into profits The automobile and spare parts business realized revenue of 261m yuan /-13.72%, gross profit of 2.54%/-7.16pcts, and net profit of-26 million yuan.
The growth of diamond gross profit margin leads to the improvement of overall profitability, and the ability to control fees under scale expansion is constantly optimized. 22H1 overall gross profit margin + 11.08pcts to 36.23%, we think it is mainly due to the substantial increase in cultivated diamond gross profit margin and the increase in revenue share. The cost side is well controlled, and the expense rate for the period is 10.43%/-1.19pcts, in which the sales / management / finance / R & D expense rate is 0.83%, 6.03%, 1.34%, 4.91%, respectively, compared with the same period last year-0.17pct/-0.54 pct/-0.58pct/+0.11pct. The profitability is significantly enhanced, and the net interest rate of 22H1 is 21.90%/+10.55pcts.
The volume and price of superhard materials are rising, and the profit of special equipment + automobile business is expected to improve. Superhard material business: as an industry leader, Central South Diamond has a profound technical background, the HPHT method for the preparation of more than 30 carats of single crystal technology industry-leading, CVD technology has reached the world-class level. The 120,000 carat production line project has been completed and put into production, and 1.15 billion yuan is planned to be invested in the serialization of high-grade industrial diamonds and gem-grade diamonds. The release of production capacity is expected to bring simultaneous growth in revenue and gross profit. Special equipment business: the product structure is adjusted obviously and the development potential is highlighted. Special-purpose vehicles and auto parts business: expand product areas, speed up new product research and development and technological innovation, is expected to bring new growth points.
Investment advice: buy-An investment rating. To cultivate the high prosperity of the diamond racetrack, the expansion of upstream supply is limited to benefit the industry leader, while the company's special equipment and automobile business is expected to improve. Therefore, we raise our profit forecast and expect the company to achieve a net profit of 1.72 billion yuan in 2022-2024, compared with the same period last year. 45xPE will be maintained in 2022, and the target price will be raised to 41.12 yuan.
Risk tips: the acceptance of cultivated diamonds is not as expected; the supply of the industry is deteriorating; the overseas epidemic affects the mid-stream processing; the company's production is not as expected.