Event

On August 29, 2022, the company released its mid-2022 report that 2022H1 realized operating income of 687 million yuan, an increase of 25.52% over the same period last year, and a net profit of 32 million yuan, a decrease of 56.09% over the same period last year. Of this total, 22Q2 achieved an operating income of 612 million yuan, an increase of 63.25% over the same period last year, and a net profit of 43 million yuan, a decrease of 12.75% over the same period last year.

Business analysis

The epidemic has a certain impact on the acceptance of the company's equipment, which is expected to accelerate in the second half of the year. The overall acceptance rhythm of the company's 22H1 was affected by the epidemic, but the performance of 22Q2 was significantly improved compared with 22Q1, with high revenue growth in a single quarter and a profit turnround compared to 22Q1. Due to the decline in the sales price of the company's products, the company's 22Q2 achieved a gross profit margin of 20%, a year-on-year drop of 12.52pcts, a net profit rate of 6.96%, and a year-on-year decline of 6.06pcts. We think it is mainly due to the company's current strategy to increase market share. The second half of the year is the peak of sorting equipment acceptance, at the same time, the impact of the epidemic is expected to weaken, the company acceptance progress is expected to accelerate.

The prosperity of the low-growth industry of 22H1 express service volume is poor, and it is expected to pick up after the impact of the epidemic weakens: according to the data of the State Post Bureau, the business volume of 22H1 express service enterprises nationwide has totaled 51.22 billion, an increase of 3.7% over the same period last year, and a growth rate of 45.78% in the same period last year. Market demand declined significantly under the influence of the epidemic. In July, the national express delivery business volume increased by 8% compared with the same period last year, with a month-on-month increase in 5.2pcts. It is expected that the prosperity of the industry will continue to pick up in the second half of the year as the impact of the epidemic weakens.

Orders on hand remain high, and the layout of airports and intelligent warehousing has shown initial results: by the end of June 2022, the company had orders on hand of 2.48 billion yuan, and according to our estimate, the newly signed order for 22H1 is about 737 million yuan. The company's new development direction is expected to improve the growth ceiling, intelligent warehousing orders of 96.67 million yuan, starting layout in new energy, food and beverage, cold chain and other industries; airport baggage sorting orders of 20.7 million yuan are installed and debugged in many prefecture-level cities in China, and the airport cargo sorting system is sold overseas.

Profit forecast and investment suggestion

It is estimated that the company's net profit from 2022 to 2024 will be 2.71 billion yuan, 335 million yuan, corresponding to the previous PE20X/16X/12X. Considering that the company has a significant competitive advantage in ploughing the underlying technology, it is expected to achieve high performance growth with the expansion of downstream application fields in the future. Maintain the "overweight" rating.

Risk hint

The decline in downstream express logistics capital expenditure reduces equipment procurement demand, new business expansion is not as expected, market competition deteriorates and gross profit margin is reduced, restricted stocks are lifted, and the equipment acceptance cycle is prolonged as a result of the epidemic.