The company's performance has improved steadily, and H revenue and return net profit have continued to grow in 2022.

The company released its semi-annual report for 2022 on the evening of August 25, 2022. According to the report, the operating income of H1 Company reached 674 million yuan in 2022, an increase of 16.44% over the same period last year. The main reason for the growth is the rapid revenue growth of the company's environmental monitoring system, system transformation and operation and maintenance services. The net profit was 158 million yuan, an increase of 40.84% over the same period last year, of which the deducted non-net profit was 129 million yuan, an increase of 70.51% over the same period last year. The growth rate of non-net profit was higher than that of home net profit. The main reason was that 2022H1 Company received 15.1756 million yuan of government subsidies, which was 7.9735 million yuan lower than that of Hl in 2021, making the company's non-recurrent profit and loss of 29.0875 million yuan and 47.71% lower than the same period last year. The year-on-year growth of 4.32pct shows that the company's product competitiveness and premium capacity have been enhanced. The expense rate during the 2022H1 period was 27.05%, a decrease of 3.29pct compared with the same period last year. Net interest rate 23.44%, year-on-year growth 4.18pct, overall profitability improved significantly; deducting non-net interest rate 19.15%, year-on-year growth 6.07pct from the business share, the company's environmental monitoring system business revenue of 393 million yuan, accounting for 58.32% of the total revenue, an increase of 15.32% over the same period last year. The company's main business continues to improve, which is conducive to strengthening the company's core competitiveness in the industry. The revenue from system transformation and operation and maintenance business is 145 million yuan, accounting for 21.53% of the total revenue, an increase of 55.92% over the same period last year. The revenue from operation and management services is growing rapidly, mainly because the company has undertaken the national surface water station operation and maintenance project and the national air station operation and maintenance project. Revenue is recognized in the current period. The revenue of the gas analyzer and spare parts business was 102 million yuan, accounting for 15.08% of the total revenue, an increase of 18.78% over the same period last year. Looking at 2022Q2 alone, the company realized revenue of 359 million yuan, an increase of 1.85% over the same period last year; and the net profit of returning home was 80 million yuan, down 5.89% from the same period last year. Gross profit margin is 47.68%, year-on-year increase of 7.46pct, month-on-month decrease of 0.07pct; net profit margin of 22.05%, year-on-year-1.89pct, month-on-month-2.97pct. Q2 may be affected by the epidemic, profitability decreased slightly compared with Q1, but still increased significantly compared with the same period last year.

Policy-oriented, continue to make efforts in the field of carbon emission monitoring, and build the basic growth point of the company's profits.

Since September 2021, the Ministry of Ecology and Environment has launched the pilot work of carbon monitoring and assessment at the three levels of key industries, cities and regions. The spokesman pointed out that it is necessary to continue and steadily promote the pilot work and promote more thermal power enterprises to carry out online carbon dioxide monitoring work. Build a carbon monitoring network covering the whole country. In June 2022, the State Council issued the guidance on strengthening the Construction of Digital Government to promote the green and low-carbon transformation and build an intelligent monitoring and dynamic accounting system for carbon emissions. Based on the dual carbon and energy emission reform policy, the company continues to develop greenhouse gas monitoring equipment and systems. In the pollution source carbon emission monitoring products, infrared carbon emission monitoring system and Fourier transform infrared spectroscopy carbon emission monitoring system are established to monitor a variety of greenhouse gases, including CO2.CH4. At the same time, a high-precision intelligent carbon emission measurement system and a carbon account management platform are established to make carbon emissions measurable and manageable and promote the green development of enterprises. Based on the general trend of policy to promote the development of the industry, the company will benefit from the continuous investment of the government in the environmental protection industry and accelerate the speed of business.

Equipment + system + service, the company provides customers with one-stop solutions the company can not only provide customers with pollution source waste gas monitoring, greenhouse gas monitoring, industrial water monitoring and other testing equipment, at the same time can provide professional environmental protection information engineering solutions, intelligent environmental protection information software, to achieve a comprehensive combination of hardware and software, in the later service, the company has a strong comprehensive platform advantage It can carry out a variety of operation and maintenance services and testing services, such as environmental governance, third-party monitoring, environmental informatization and so on. At present, the company has established an operation and maintenance network covering the whole country, with 132 technical service centers throughout the country, with nearly 1000 professional and technical service engineers and more than 200 operation and maintenance vehicles, annual operation and service of automatic detection water stations, air stations and pollution source monitoring equipment totaling nearly 10,000, serving medium-and high-end customers in many fields, including electric power, building materials, iron and steel, petrochemical, chemical industry and so on. With its leading technological advantages, rich industry experience and high-quality customer base, the company will continue to optimize its popularity in the field of environmental protection, expand its influence and improve profitability at the same time.

Investment suggestion

It is estimated that the company's homing net profit in 2023 and 2024 is 329 million yuan and 427 million yuan respectively, corresponding to the current PE of 18X / 14X, maintaining the buy rating.

Risk hint

Macroeconomic downturn, market demand decline; raw material prices fluctuate sharply; carbon monitoring policy is less than expected.