Event: the company released a semi-annual report that 22H1 realized income of 990 million yuan, with a decrease of 2.6%; net profit of return to the mother was-10 million yuan, with a decrease of 116%; net interest rate of return to the mother was-1.3%, with a decrease of 8.9 pct; non-net profit of-20 million yuan was deducted by the mother, with a reduction of 124%, and the non-net interest rate was deducted by 1.8% and 8.9pct.

In a single quarter, 22Q1/Q2 achieved revenue of 3.5 billion yuan, year-on-year change + 5% 10.9pct/7.8pct 6%, net profit of 0.07%, 112% less than 123%, net interest rate of 1.9%, 0.9% and 0.9%, respectively. Deducting the non-net profit of 0.1 million yuan, minus 134% and 118%, deducting the non-net interest rate of 2.7% and 1.2%, and deducting 11.2pct/7.7pct.

Combined with the influence of external environment and internal factors, the main reasons for the company's performance loss are as follows:

In the first half of 2022, the epidemic situation throughout the country was repeated, which had an impact on the issuance of orders, delivery, transportation and installation services of products to a certain extent; the real estate industry continued to decline and the progress of the project slowed down, resulting in delayed product acceptance and the corresponding payback cycle increased accordingly; steel prices showed a downward trend but the impact on profits was lagging behind, and the corresponding main business costs were still high.

The gross margin of 22H1 is 21.6%, which is the same as minus 6.8pct. 22Q1/Q2 gross profit margin is 22.9% Universe 20.8%, year-on-year change-7.5pct/-6.5pct. The expense rate during the 22H1 period is 19.8%, with the increase of 3.2pct, mainly to enhance the core competitiveness of the company's brand, to continuously increase advertising efforts, to increase sales costs compared with the same period last year, and to increase R & D investment in order to continuously strengthen innovation and improve product quality and technology. Among them, the rates of sales, management, research and development, and financial expenses are 12.3%, 4.8%, 3.4%, 0.7%, respectively, with year-on-year changes + 2.64pct/+0.02pct/+0.59pct/-0.03pct.

In terms of different channels, the operating income of 22H1 dealer channel / engineering channel / e-commerce channel is RMB 438 million, accounting for 52.18%, 46.02%, 1.80% and 28.6% of the main business income, respectively. According to the product type, the operating income of 22H1 steel door / other door / smart lock is RMB 727 million respectively, accounting for 76.29% of the main business income, accounting for 16.66% of the main business income 7.04%.

Adhere to the intelligent development strategy and actively promote production and marketing. Guided by the company's business objectives, the company's management implements the development strategy of "intelligent manufacturing, intelligent management and intelligent products", grasps the market opportunity in the post-epidemic era, overcomes the external unfavorable factors of rising raw materials, and refines its internal skills. constantly adjust and improve the product structure, speed up the construction and production of Changtian Wisdom Factory, build and strengthen the marketing service system, and increase the development of engineering channel customers.

Profit forecast and rating: we expect the company's 22-23 net profit to be RMB 271 million, an increase of 97% and 35% respectively, and the current closing price corresponds to a PE of 15.6 and 11.5 times, respectively. Considering that the company has increased its production capacity in recent years, the strength of the subdivision field has been enhanced, the leading position of the safety door industry has been continuously consolidated, and the intelligent lock business has opened a new growth curve.

Reference comparable company gives 22 years 19-21 times PE, corresponding to the reasonable value range of 11.79-13.03 yuan, given "better than the big city" rating.

Risk tips: raw material price rise risk, market competition risk, real estate industry fluctuation risk, dealer management risk.