Core views:
Net profit of 22H1 was -64.1% compared to the same period last year, and profit was achieved for 2 consecutive quarters under the low level of industry sentiment. According to financial reports, 22H1 achieved operating income of 23.18 billion yuan, or -27.4% year on year, and net profit of 220 million yuan to the mother, or -64.1% year on year. 21H1 After excluding the influence of factors related to the Baowo incident, 22H1's total profit was -76.5% year-on-year. The decline in revenue in the first half of the year was mainly due to a decline in commercial vehicle sales; the decline in performance was mainly due to a decline in the company's commercial vehicle sales, a decrease in investment income from joint ventures, and a decline in the fair value of financial assets. In 22Q2, the company achieved operating income of 10.79 billion yuan, or -32.8% year on year, and achieved net profit of 83 million yuan to the mother, or -65.2% year on year.
Under the low level of industry sentiment, the company achieved profits for 2 consecutive quarters, showing good resilience to risks.
The company's commercial vehicle market share increased year over year, and the export performance was impressive. According to the interim report, the company sold 25,000 commercial vehicles on 22H1, or -39.3% year on year, outperforming the industry (wholesale sales volume -41.2% compared to the same period). The commercial vehicle market share was 14.6%, +0.5pct year on year, ranking first among commercial vehicles. The company's 22H1 sold 17,000 light trucks, -32.4% year on year, industry sales -26.8% year on year; 58,000 medium and heavy trucks were sold, -56.6% year on year, outperforming the industry (wholesale sales volume -62.1% year on year). The company's 21H1 light truck and medium and heavy truck markets accounted for 15.6% and 13.3% respectively, compared to -1.3 pct and +1.7 pct respectively. According to reports, 22H1 exported 46,000 vehicles, +54.8% over the same period last year. It completed the listing of new energy light trucks in the EU and won orders for 1,022 electric buses in the Chilean market.
Profit forecast and investment advice: Under the premise that the impact of the epidemic is manageable in the short term, considering the recovery in industry demand and the company's medium- to long-term product competitiveness, the company's EPS for 22-24 is expected to be 0.13/0.22/0.28 yuan. Considering the recovery of profits from a low point and a comparable company valuation, the company was given 15 times PE for 23 years, with a reasonable value of 3.34 yuan/share to maintain the “buy” rating.
The correction of year-on-year sales growth in the commercial vehicle segment may be an important catalyst for stock prices. There is still room for profit expectations and valuations to rise.
Risk warning: industry sentiment is declining; raw material prices are rising; industry competition is intensifying, etc.