1H22 performance is basically in line with our expectations.
The company announced 1H22 results: revenue of 5.67 billion yuan, year-on-year + 4.1%, month-on-month-11.0%; return to the mother net profit of 325 million yuan, corresponding to earnings per share of 0.1 yuan, year-on-year-12.6%, month-on-month-9.1%. The revenue in the second quarter was 2.85 billion yuan, + 5.0% compared with the same period last year, and the net profit was 180 million yuan,-16.0% compared with the same period last year, which is basically in line with our expectations.
Trend of development
Continue to focus on intelligent sanitation business, sanitation services remain high growth. After the separation of electromagnetic wire business in 2021, the company continues to focus on intelligent sanitation business. From the 1H22 income structure: 1) sanitation equipment income 2.83 billion yuan, + 2% year-on-year, income accounted for 49.9%, remained stable; 2) sanitation service income 1.9 billion yuan, + 40.6% year-on-year, mainly contributed to new projects; 3) other business income of 940 million yuan, the proportion of income further decreased to 16.58% from 24.3% in the same period last year. The domestic leading sanitation industry chain big data Yun Wisdom Sanitation platform "Zhiyun platform" independently developed by the company has provided intelligent services to customers with more than 70, 000 products across the country.
The gross profit margin has rebounded and the leading position of sanitation equipment has been firmly established. In the first half of the year, the company's gross profit margin was from + 0.3ppt to 23.5% year-on-year, with smart equipment / smart services / other business gross margins ranging from + 1.03/-0.30/+2.11ppt to 25.88%, 18.32% and 26.56%, respectively. In the first half of the year, the total sales volume of the company's sanitation equipment is 7080, which has been the first in the same industry for 21 consecutive years. New energy products continue to be released, with sales of 599 vehicles in the first half of the year, an increase of 184% over the same period last year, and a market share of 29.7%, ranking first.
There are plenty of orders for sanitation services on hand, and the accelerated release of new energy products leads to performance growth. In the first half of the year, the company signed a total of 45 sanitation service projects, with a total new contract amount of 5.6 billion yuan and an annual contract value of 1 billion yuan, ranking first in the industry market. By the end of the first half of the year, the company has operated a total of 211sanitation service projects, the annual contract value of the stock market is 4.87 billion yuan, and the total amount of contracts to be executed has reached 41.73 billion yuan. In addition, the company's new energy products have covered more than 40 varieties, such as cleaning, cleaning, garbage collection and transfer, municipal and other series. with the continuous promotion of the double carbon goal, we believe that the sales of new energy sanitation equipment are expected to increase, leading to further growth.
Profit forecast and valuation
Keep profit forecasts for 2022 and 2023 unchanged.
The current share price corresponds to a price-to-earnings ratio of 18.9 times 2023 / 17.3 times earnings. Maintain an outperform industry rating and a list price of 5.50 yuan, corresponding to 21.6 times 2022 price-to-earnings ratio and 19.8 times 2023 price-to-earnings ratio, which has 14.1% upward space compared with the current stock price.
Risk
The growth rate of orders is lower than expected, market competition intensifies, and the impact of macroeconomic fluctuations.