Under the pressure of the downstream demand disturbed by the epidemic and the performance of raw material costs, the 22H1 revenue of the short-term pressure company dropped 13.4% to 781 million yuan, the net profit returned to the mother decreased by 41.5% to 41 million yuan, and the net profit after deducting non-profit decreased by 50.3% to 36 million yuan, mainly due to the demand pressure under the influence of the epidemic and the real estate environment, the upward cost of raw materials and the periodic shutdown and rectification of the Huizhou plant. On a quarter-to-quarter basis, 22Q1/Q2 's single-quarter revenue fell 3.7% by 20.8% to 376,000,000 yuan, the year-on-year change in net profit from + 79.0% to 0.09 million yuan, and after deducting the year-on-year change in net profit from + 53.0% qure 85.4% to 0.28 billion yuan. We estimate that the EPS of the company in 22-24 is 0.14, 0.17, 0.20 and BPS is 2.61, 2.77 and 2.97 yuan respectively. Since 2011, the historical center of the company's PB (LF) is 1.92x. Taking into account the slowdown in the growth rate of real estate sales area over the past 18 years, with reference to the average of 1.41x PB (LF) of the company over the past 18 years, the company has been given a target PB of 1.41x for 22 years, corresponding to the target price of RMB3.68x, maintaining the "overweight" rating.

The profit of wood-based panel business is expected to be repaired, and the net interest rate of forest business is year-on-year + 5.30pct sub-business. In terms of wood-based panel, the terminal demand of wood-based panel has been under pressure due to the decline of the real estate boom and repeated disturbances of the epidemic situation in the past 22 years. The company actively opened up multiple customers such as office furniture and medical furniture to deal with it. 22H1 wood-based panel business revenue fell 15.93% to 707 million yuan compared with the same period last year. Net profit fell 68.54% year-on-year to 14 million yuan, and business net interest rate dropped 3.20pct to 1.91% compared with the same period last year. We judge that it is mainly due to the rise in raw material costs. With the decline in the price of bulk raw materials, the profitability of the main industry of wood-based panels is expected to be repaired gradually. In terms of afforestation, 22H1 forest revenue decreased 22.18% to 47 million yuan compared with the same period last year, but benefited from the increase in forest prices, the business net interest rate also increased 5.30pct to 61.01%.

Under the pressure of raw material cost, the gross profit margin is under short-term pressure, 22H1 net profit margin is lower than the same period last year, 2.6pct22H1 's sales gross profit margin is also reduced to 13.5%. We judge that it is mainly due to the company's implementation of the new accounting standards, the transportation, packaging and loading and unloading costs arising from the implementation of the contract are transferred from sales expenses to operating costs, and secondly, it is also affected by the rising cost of raw materials, after restoring the impact of transportation and packaging costs in the same period. We expect the gross profit margin of 22H1 to fall by 2.3pct. During the 22H1 period, the expense rate was also reduced by 7.6pct to 9.5%, of which the sales expense rate was also reduced to 0.5%, mainly due to the adjustment of the above accounting standards; the management + R & D expense rate increased by 0.8pct to 8.6%, and the financial expense rate by 0.1pct to 0.5%. Under the combined impact, the company's net sales interest rate was also reduced by 2.6pct to 5.2%.

The leader of the wood-based panel industry, maintaining the "overweight" rating.

Taking into account the disturbance of terminal demand and the impact of raw material costs, we downgrade the forecast of wood-based panel business income and gross profit margin. It is estimated that the net profit of homing in 22-24 years will be 1.64-1.94-309 million yuan, respectively, corresponding to 0.14-0.17-0.20 for EPS and 2.61-2.77 for BPS. With reference to the average value of 1.41 times PB (LF) of the company since 2018, the company is given 1.41 times of the target PB in 2022, corresponding to the target price of 3.68 yuan (the previous value is 3.80 yuan), maintaining the "overweight" rating.

Risk tips: the development of the epidemic is uncertain, downstream demand is lower than expected, and customer expansion is not as expected.