What happened: the company released its mid-2022 report on August 26. 1H22's revenue was 870 million yuan, and YoY+25.2%; 's net profit was-44 million yuan (the same period last year-57 million yuan), reducing its loss by 13 million yuan compared with the same period last year. 2Q22 made a profit in a single quarter. The company's reported results are within the range of previous performance forecast data, in line with market expectations.
Revenue levels fluctuated from quarter to quarter; 2Q22 was profitable. In a single quarter, the company: 1) 1Q22 revenue 240 million yuan, YoY+21.8%; return net profit-79 million yuan, the same period last year-47 million yuan. 2Q22's revenue was 630 million yuan, and YoY+26.6%; 's net profit was 35 million yuan, compared with-10 million yuan in the same period last year. Revenue levels fluctuated from quarter to quarter, and 2Q22 was profitable. 3) the gross profit margin of 2Q22 is 23.0%, which is higher than that of the same period last year, and the net profit rate is 5.6%, which is-1.8% in the same period last year. The 1H22 comprehensive gross profit margin was 20.3%, up 0.70 ppt from the same period last year; the net profit margin was-5.0%, compared with-8.1% in the same period last year.
Focus on the innovation drive of the main industry and consolidate the industrial foundation. From a product point of view, the company 1H22:1) radar and radar supporting revenue of 360 million yuan, YoY+84.6%, accounted for the total revenue increased 13.33ppt to 41.4% compared with the same period last year.
Radar and its accessories are the company's products with the highest gross profit margin, and the increase in the proportion of revenue has raised the overall gross profit level of the company; 2) the revenue of public safety products is 250 million yuan, with YoY+41.3%, accounting for 29.1% of the total revenue; 3) the revenue of power products is 210 million yuan, and YoY+7.6%, accounts for 24.4% of the total revenue. 4) revenue of mobile support equipment is 40 million yuan, YoY-63.7% 5) the revenue of information transformation of grain warehousing is 1.345 million yuan, YoY-85.6%.
The company's performance turned from loss to profit in the first half of the year, mainly due to the strengthening of the delivery of orders for projects such as radar and its supporting facilities and public safety products, steady growth in revenue, and strengthening the control of key expenses at the same time.
Increased cost control capacity; growth in receivables / inventory / contract liabilities may indicate a boom in demand. During the 1H22 period of the company, the expense rate decreased by 6.36ppt to 26.6% compared with the same period last year, and the expense rates of all four items were improved. Among them, the sales expense rate was 7.7%, down 0.51 ppt from the same period last year; the management expense rate was 13.4%, down 3.40 ppt from the same period last year; the financial expense rate was 4.2%, down 1.43 ppt from the same period last year; and the R & D expense rate was 1.3%, down 1.02ppt from the same period last year. By the end of 2Q22, the company: 1) accounts receivable and bills 2.43 billion yuan, an increase of 20.8% over the beginning of the year; 2) the advance payment was 80 million yuan, an increase of 62.0% over the beginning of the year, mainly due to the increase in the advance payment of radar and spare parts materials in the field of low-altitude perception and smart equipment; 3) inventory of 2 billion yuan, an increase of 16.5% over the beginning of the year; 4) the contract debt was 430 million yuan, an increase of 84.2% over the beginning of the year 5) operating net cash flow-520 million yuan (- 890 million yuan in the same period last year), mainly due to strengthening the management of accounts receivable, an increase in sales rebates and a decrease in procurement payments.
Investment suggestion: the company focuses on three major sectors: electronic equipment, industrial foundation and network information system. In June 2022, the company awarded a total of 3.459 million shares (2.75% of the total equity) to 300 incentive targets (9.6% of the total) for the first time, demonstrating confidence in future development. We estimate that the company's net profit in 2022-2024 will be 223 million yuan, 276 million yuan and 354 million yuan respectively, and the current stock price will be 28x/23x18x corresponding to PE in 2022-2024. Taking into account the changes in corporate governance brought by the company's sound product line and equity incentives, we give 2023 25 times PE,2023 annual EPS of 1.30 yuan per share, corresponding to the target price of 32.50 yuan. Maintain the recommended rating.
Risk tips: new product research and development is lower than expected; product production and delivery is not as expected.