Event: the company released the mid-2022 report: the operating income in the first half of the year was 5.669 billion yuan, + 4.06% compared with the same period last year; the net profit was 325 million yuan,-12.57%; the net profit was 288 million yuan,-33.83%; and the net cash flow from operating activities was 192 million yuan, + 113.56% compared with the same period last year.
Comments:
Intelligent sanitation service continues to make efforts, and its leading position is becoming more and more stable. In the first half of 2022, the company's smart sanitation revenue was 4.729 billion yuan, + 14.66% compared with the same period last year, of which the revenue from smart equipment / smart services was 2.827 billion yuan, respectively, compared with the same period last year. The company has signed a total of 45 sanitation service projects, covering 17 provinces across the country, with a total new contract value of 5.6 billion yuan and an annual contract value of 1.002 billion yuan, ranking first in the market in the same industry; the company's total sales of sanitation equipment is 7080, of which 599 new energy products are sold, an increase of 184% over the same period last year, accounting for 29.7% of the market share, ranking first in domestic industry sales for 21 consecutive years.
Gross profit margin increased slightly, expense rate increased, and cash flow improved significantly. The company's gross profit margin in the first half of the year was 23.46%, which was + 0.25pct compared with the same period last year. The expense rate for the period of the company is 14.83%, year-on-year + 2.08pct, in which the sales / management / R & D / financial expense rate is 6.26%, 7.59%, 2.62%, 0.98%, respectively, compared with the same period last year + 0.58/0.94/0.21/0.56pct. The return of the company's net operating cash flow in the first half of the year is mainly due to the increase in the purchase of notes payable and the lack of payment date.
Strong technical strength, cloud platform to promote digital development. In the first half of the year, the company applied for a total of 44 patents, including 30 invention patents, accounting for nearly 70%. At present, the company has a total of 935 independent patents, technology patents, invention patents ranked first in the industry, strong technical strength.
Profit forecast: cover for the first time, give "overweight" rating. We forecast that from 2022 to 2024, the operating income of the company will be 18.96 billion yuan, the net profit of return to the mother will be 8.02 billion yuan, and the PE will be 19.47x/17.06x/13.87x.
Risk tips: domestic and foreign situation fluctuates more than expected; goodwill impairment risk; the company's business development is not as expected; upstream procurement is not as expected; sanitation service competition intensity is increased; profit forecast and valuation model is not as expected