The company's 22H1 revenue was 200 million yuan (-28.2%), net profit of -5.754 million yuan (-114.9%), and net profit of the non-return mother was 9.661 million yuan (-127.6%). The company's factory is located in Shanghai. 22H1 due to the impact of epidemic control, the company's operations were significantly affected. Based on the interim report data, we lowered the company's net profit forecast for 2022/23 to 702/160 million yuan (the original forecast was 23/32 million yuan), and added the net profit forecast for 2024 to 230 million yuan. Maintain a “buy” rating.
Business revenue: 22H1 epidemic control has had a significant impact on the company's operations. (1) Quarterly: 22Q1/Q2, the company's revenue was 0.98/10 billion yuan, -26.9%/-29.3% year on year; net profit of the mother was 29/-6.04 million yuan, -98.8%/-138.5% year on year. The company's operations in 22H1 were greatly affected by the epidemic control. (2) By business: 22H1, revenue from the intelligent equipment business/auto parts business was 996/110 million yuan, -24.9%/-30.9% year on year. Sales in the auto parts business declined, and project delivery for the intelligent equipment business was delayed.
Profitability: Costs and expenses are more rigid, and profitability is reduced by 22H1. (1) Gross profit margin: 22H1, the company's gross margin is 14.6% (-15.3pcts). There was a clear decline in gross margin, mainly a decline in the output of the auto parts business, while fixed costs accounted for a relatively high share. (2) Expense rate: 22H1, the company's sales/management/R&D/finance expense ratio is 1.6%/10.8%/8.1%/-1.1%, compared to +0.19/+3.7/+0.17/+0.03pcts.
Business outlook: Orders for intelligent equipment are sufficient, products in the auto parts business are being iterated, and the carbon dioxide air conditioning pipeline business continues to advance. (1) Intelligent equipment business: In 2021, the company signed a new order of 530 million yuan. Most of them are expected to be delivered in 2022. The delivery rate of 22H2 orders is expected to accelerate. On 22H1, the intelligent equipment business signed a new order of 270 million yuan (+5.9%), continuing the growing trend in the context of the local epidemic. (2) Auto parts business: It is expected that the second half of the year will begin to experience marginal improvement. In 2023, with product iteration, the profitability of the auto parts business is expected to increase. (3) Carbon dioxide air conditioning pipeline business: It is expected to develop more car company customers next year. In addition, the company is also actively developing valve products for heat pump systems.
Risk factors: The risk that epidemic control affects the company's normal operation; the risk that the delivery speed of the intelligent equipment business is lower than expected; the risk that the carbon dioxide air conditioning pipeline business is developing at a lower rate than expected.
Investment advice: Based on the interim report data, we lowered the company's net profit forecast for 2022/23 to 702/160 million yuan (the original forecast was 23/32 million yuan), and added the 2024 net profit forecast to 230 million yuan. The current stock price corresponding to PE is 70/31/22 times. Maintain a “buy” rating.
