occurrences
The company released its 2022 semi-annual report. It achieved revenue of 6.26 billion yuan in the first half of 2022, a decrease of 7.9% over the previous year, net profit of 180 million yuan, an increase of 16.0% over the previous year, and Gumo's net interest rate of 2.9%.
Brief review
Floods and other factors dragged down construction progress, and revenue declined slightly. The company's revenue for the first half of 2022 was 6.26 billion yuan, a year-on-year decrease of 7.9%. Segmenting specific business segments: the revenue of the engineering construction business in the first half of the year was 4.84 billion yuan; due to factors such as regional floods in South China, the construction progress of some projects slowed down, and revenue fell 11.8% year on year; the clean energy power generation business had revenue of 930 billion yuan in the first half of the year due to reduced water waste at Anjiang and Taojiang Hydropower stations in Hunan and connected to the grid for power generation at the Gaopi Longhu Hydropower Station in Hanjiang; revenue from the tower tube business stopped falling and rebounded, up 3.8% year on year; revenue from exploration design and consulting business was 0.4 billion yuan, up 62% year on year.
The gross margins of all businesses are now rising, leading to steady positive growth in performance. The company's gross profit margin for the first half of 2022 was 13.7%, up 2.1 percentage points year on year, net profit of 180 million yuan, up 16.0% year on year, mainly due to: 1) the gross profit margin of the engineering and construction business, which accounted for 77.4% of revenue, up 1.1 pct from the previous year; 2) the revenue share of the clean energy power generation business reached 14.8%, up 2.3 pct from the previous year, and the gross margin remained at a high level of 63.2%; 3) the revenue share of the high-margin exploration design and consulting business increased 0.3 pct to 0.6% in 2021. The gross margin was 38.9%.
Clean energy installations have accelerated, and power generation has increased slightly. Recently, the speed at which the company's clean energy power generation projects were connected to the grid has accelerated, adding 260 MW of installed capacity in January-August, an increase of 44.4% compared to the full year of 2021, the highest level in history. As of August 2022, the company holds an installed capacity of 1802.4 MW, including 313 MW of hydroelectric power generation, 723 MW of wind power generation, and 766.4 MW of photovoltaic power generation. The feed-in capacity in the first half of the year was 2.03 billion kilowatts, an increase of 10.3% over the previous year.
Raise profit forecasts and maintain buying ratings. We raised the company's profit forecast. The 2022-2024 EPS was 0.33/0.45/0.56 yuan (the original 2022-2023 EPS was 0.30/0.34 yuan). The company's engineering, clean energy power generation and tower business was given the same PE valuation level of 5.6X/22.0X/18.1X in 2023 as a comparable company in the industry, corresponding to the target price of 9.17 yuan, maintaining the purchase rating.
Risk warning: 1. The development of the clean energy business fell short of expectations; 2. The wind, lighting and incoming water conditions fluctuated; 3. The gross margin of the engineering construction business continued to decline.
