What happened: recently, the company released its mid-2022 report that the company's operating income in the first half of 2022 was 753 million yuan, an increase of 24.99% over the same period last year. The net profit belonging to the owner of the parent company was 68 million yuan, up 77.91% from the same period last year, and the net profit was 64 million yuan after deducting it, an increase of 88.50%.
Comments:
Revenue growth is steady and profitability continues to pick up. On the revenue side, the company's income in the first half of 2022 was 753 million yuan, an increase of 24.99%. Quarterly growth rates of 2021Q1-Q4 and 2022Q1-Q2 were 57.27%, 45.58%, 36.31%, 27.49%, 29.67% and 21.45%, respectively. At the profit end, the company achieved a net profit of 68 million yuan in the first half of 2022, with an increase of 77.91% and 109.37% respectively. Q2 gross profit margin 22.04%, the same increase in 4.67pct, mainly due to the decline in raw material prices, lower sea freight, promoting lean production, optimizing processes to reduce costs and the increase in the proportion of agricultural machinery business structure changes. Q2 sales expense rate 2.21%, reduced 0.18pct, management expense rate 4.06%, increased 0.47pct, R & D expense rate 3.81%, decreased 0.26pct, maintained high investment in R & D and continued to consolidate competitiveness. Affected by the increase in foreign exchange earnings, the financial expense rate decreased 1.22pct compared with the same period last year. We believe that with the stabilization of raw material costs and sea freight, the continuous optimization of gross profit structure and the continuous improvement of production process level, the company's profitability will continue to pick up, and the company's performance in the second half of the year is expected to maintain restorative growth.
The basic disk of motorcycle and agricultural machinery chain has been rammed continuously, and the domestic and foreign markets have been opened up simultaneously. At present, motorcycle chain and agricultural machinery chain are still the top two businesses with the highest share of income. in the first half of the year, the company's vehicle chain business income mainly based on motorcycles was 371 million, an increase of 11.33%, accounting for 49%, and agricultural machinery chain business income was 159 million, an increase of 74.89%. Income accounted for 21.16%. In terms of motorcycle chain business, the global motorcycle chain matching + after-sales market has a large scale, and the core barriers are cost control, stable mass production and supply capacity and brand influence (the aftermarket pays attention to brands). In the field of motorcycles, the company has formed a long-term cooperative relationship with well-known brands such as Xinzhou Honda and Wuyang Honda, which has a certain international popularity and competitive advantages continue to consolidate. The field of driving motorcycles at home and abroad + after-sales market continues to develop, at the same time in the field of two-wheelers, electric two-wheelers and variable-speed bicycles are also expected to become growth points. Agricultural machinery chain business benefits from the domestic grain price uplink cycle demand is expected to maintain rapid growth, and similar to the motorcycle chain, agricultural machinery chain replacement cycle is shorter, the after-sale market scale is larger, the company still has a large increase in the company's share, the company's agricultural machinery customers cover major domestic machinery factories and foreign German Klaas, Aike and other international leaders, the main grain producing areas continue to improve the layout of after-sales agents. We believe that the company's two traditional main business motorcycle and agricultural machinery chain business will achieve steady growth in the medium and long term.
In the field of comprehensive industrial development, there is a broad space for long-term growth. The scale of the chain market is large, and the downstream application fields are scattered, including logistics, automatic production lines, vehicle and ship engine systems, high-end application scenarios, technical barriers and higher requirements for product life, and the share of foreign manufacturers is relatively high. the main foreign manufacturers include Yves of Germany, Chunben of Japan, Bogwarner of the United States, etc., with large room for domestic substitution, and the company's current industrial product line covers a wide range of products. Including conveyor chain, double speed chain, timing chain and oil pump chain and so on. In the first half of the year, the company's industrial income was 162 million, an increase of 34.69%. It has become the company's third largest business sector. at present, the main income comes from contract manufacturing for foreign leaders.
In 2016, the company undertook the national "strong base engineering" project-the national scientific research project of high-power marine engine chain, which is of benchmarking significance. The company will make a comprehensive effort in the industrial field, after years of accumulation, the technical strength has been significantly improved, in the industrial field is expected to gradually replace foreign investment to achieve a faster increase. The compound growth rate of the company's industrial income in 2017-2021 is as high as 36%. In the first half of the year, the industrial sector continues to grow rapidly, and the industrial field is large and scattered. The company is expected to realize the rapid development of the industrial field by virtue of its outstanding technical strength and open up long-term growth space.
Profit forecast and investment rating: we expect the company's net profit from 2022 to 2024 to be 154 million yuan, 203 million yuan and 259 million yuan respectively, with a corresponding EPS of 1.88 yuan per share, 2.48 yuan per share and 3.16 yuan per share, respectively, and the corresponding share price PE is 19 times, 15 times and 11 times respectively. In view of the continued recovery of the company's profitability, steady growth of traditional business, comprehensive expansion of the industrial sector, large room for long-term growth, and maintain the company's "buy" rating.
Risk factors: exchange rate change risk; trade policy change risk; industrial chain system business development is not as expected risk.