Event description
According to the 2022 semi-annual report of Xianhui Technology, 2022H1 achieved revenue of 423 million yuan, down 21.05% from the same period last year; net profit from its mother was-37 million yuan, down 151.05% from the same period last year; of this total, 2022Q2 realized revenue of 132 million yuan, down 65.72% from the same period last year and 54.69% from the previous year; and net profit from its mother was-57 million yuan, down 204.74% from the same period last year and 378.21% from the previous year.
Event comment
The net profit of 2022H1 fell 151.05% compared with the same period last year, and the net profit of deducting non-return decreased by 179.88% compared with the same period last year, mainly because the Shanghai parent company stopped production for a long time in the second quarter affected by the epidemic, and the on-site installation and commissioning progress and personnel deployment were also affected by the epidemic control in various places, and the business income in the second quarter was lower than that in the previous period. And the size of the company continues to expand compared with the same period last year, the number of employees increased significantly, R & D investment, all kinds of expenses increased compared with the same period last year. In the follow-up, as the epidemic is controlled and the scale expansion slows down, revenue and profits are expected to recover gradually.
The net cash flow generated by 2022H1's operating activities was-385.9224 million yuan, a decrease of 45151.58% compared with 856600 yuan in the same period last year, mainly due to the increase in the number of employees during the epidemic period to ensure the normal operation of the business and to meet the needs of the expansion of the group. Cash paid for purchases of goods and cash paid for employees increased greatly over the same period last year. In addition, the proportion of bills paid for the purchase of goods decreased compared with the same period last year, while the proportion of bank wire transfer increased, resulting in a greater increase in cash payments for the purchase of goods.
Orders continue to grow, and future revenue is expected to be guaranteed. From December 13, 2021 to April 6, 2022, the total amount of contracts and fixed notice received by the company from Ningde Times and its subsidiaries is about 289 million yuan (excluding tax). From April 7, 2022 to August 30, 2022, the company and Fujian Dongheng received a cumulative total of various contracts and fixed-point notices from Ningde Times and its holding subsidiaries totaling about RMB 807 million (excluding tax). Compared with the company from Ningde Times and its holding subsidiaries in 2021, the amount of tax-free contracts has increased significantly. In addition to the related orders from the Ningde era, in May this year, the company's German subsidiary received a big order from the European automobile giant group two months after it received the next generation new energy order from the European luxury car brand. The expansion of business at home and abroad provides support for the development of the company.
It is proposed to raise 1.135 billion yuan to build new energy vehicle battery precision structural components and other projects, and continue to increase the size of new energy business. The company plans to issue shares in a non-public offering, raising a total of no more than 1.135 billion yuan (including 1.135 billion yuan), after deducting the issuance expenses, it is proposed to be used for the construction project of the system integration solution of automobile powertrain assembly line based on industrial Internet, the second phase of Wuhan high-end intelligent manufacturing equipment manufacturing project, the new energy automobile battery precision structure project and supplementary liquidity. This fund-raising investment project will expand the company's production capacity in automotive powertrain assembly lines, intelligent manufacturing equipment manufacturing and battery precision structural components. In the future, with the release of production capacity, the company's manufacturing and delivery capacity will be enhanced to match the growth of orders. Enhance the overall strength and competitiveness of the enterprise.
Adjust to "overweight" rating. In the short term, the performance or pressure is affected by the epidemic and other external environmental factors; in the long run, the company is the leader of module / PACK equipment, and acquired Fujian Dongheng this year, cutting into the field of battery module components to achieve two-wheel drive of equipment and structural components, and the company has a good space for long-term growth. It is estimated that the net profit of homing in 2022-23 is 2.0 yuan and 310 million yuan respectively, corresponding to 31 times and 20 times of PE respectively, which is adjusted to "overweight" rating.
Risk hint
1, the sales of new energy vehicles are not as expected, and the expansion of battery factories is not as expected; 2, the company's new products and new business development are not as expected.