Performance review
1H22 performance is slightly lower than market expectations.
Haitian International announced 1H22 results: revenue was 6.51 billion yuan, down 20.9% from the same period last year; net profit at home was 1.172 billion yuan, down 26.0% from the same period last year, and half-year performance was slightly lower than market expectations. We judged that it was mainly due to the current pressure on the injection molding machine scene.
The demand of Mars model is under pressure, and the second board has high demeanor. The prosperity of 1H22 products is divided, and the revenue of Mars injection molding machine decreased by 30.8% compared with the same period last year. On the one hand, we judged that it was affected by the epidemic in the second quarter. Second, under the background of last year's high base, the demand for terminal capital expenditure such as household appliances and daily necessities slowed down, and the demand for small and medium-sized machines was under pressure. The revenue of long Feiya electric injection molding machine decreased slightly by 2.1% compared with the same period last year. On the other hand, the revenue of Jupiter second-board computers increased by 29.8% compared with the same period last year, which we estimate is mainly due to more stable demand from major customers and booming demand for new energy vehicles downstream. 1H22 performed better overseas than at home, with domestic / overseas revenues down 26.3% and 8.3% respectively compared with the same period last year.
The decline in capacity utilization superimposed the high operation of raw material costs, and the gross profit margin decreased 1.6ppt compared with the same period last year. The company's 1H22 gross profit margin decreased by 1.6ppt to 30.7% compared with the same period last year. We estimate that the main reason is that the raw materials are still high and the market demand is declining, which leads to the underutilization of new capacity. 1H22's homing net profit margin fell 1.2ppt to 18.0% year-on-year, mainly due to a decline in gross profit margin. The net inflow of cash flow from operating activities reached 810 million yuan, down 45.6 per cent from the same period last year.
Trend of development
Injection molding machine in the high base year-on-year growth pressure, looking forward to the follow-up recovery. Looking back, considering that the injection molding machine has gone through the upward period of 2020~1H21, the pace of downstream capital expenditure begins to slow down, and market demand remains uncertain in the second half of the year. However, considering that the company's newly signed orders have weakened month-on-month since the middle of last year, the base pressure on newly signed orders for 2H22 may be reduced, and the overseas demand for superimposed injection molding machines will pick up, we expect year-on-year growth on the revenue side to improve in the second half of the year. In addition, considering that the price of raw materials and the marginal cost of shipping have also fallen, we believe that it is expected to repair the company's profit margin.
Profit forecast and valuation
Taking into account the weaker-than-expected downstream demand, we lowered the 2022 profit forecast by 16.5% to 2.67 billion yuan, and introduced the 2023 profit forecast of 2.98 billion yuan. The company's current stock price corresponds to 9.8x/8.8x2022/23e Pink E. Taking into account the decline in the prosperity of the industry and the overall valuation center, the target price was lowered by 33.9% to HK $23.54, corresponding to 2022e 12x target Pmax E, with upside space of 23.8%, maintaining an outperforming industry rating.
Risk.
The market demand for injection molding machine is lower than expected, the price of raw materials and sea freight has increased, and the dollar has appreciated.