Introduction to this report:
The strategic path is sorted out and clear, the transformation of scientific and technological achievements is accelerated, and we are optimistic about future development.
Key points of investment:
Maintain the increase in holdings. Q1 revenue was 562 million yuan/ +19.7%, net profit of 50 million yuan/ +44.1%, excluding 0.06 million yuan/ +72% was in line with expectations. Considering that the transformation of scientific and technological achievements is still in a recovery period, the forecast for EPS growth in 2023-24 to 0.44/0.54 yuan (previously 0.68/0.76 yuan) was lowered by 28/ 22%, the 2025 EPS was predicted to grow at 0.65 yuan by 21%, and the target price was lowered to 11 yuan to maintain the increase in holdings.
Gross and net interest rates have increased significantly, and operating cash flow is under pressure. 1) Gross profit margin 24.7% /+3.37pct, net interest rate 10.68% /+5.27pct; 2) Period expense ratio 28.57% /-0.37pct, of which sales expenses ratio is 4.57% /-0.21pct, management expenses rate 16.67% /-1.24pct, financial expense ratio 7.33% /+1.08pct due to increased borrowing interest expenses after the park is completed; 3) Net operating cash flow - 29 million yuan/ -271% due to product sales Received less cash.
Science and innovation services are deepening and expanding cooperation resources to accelerate the transformation of scientific and technological achievements. 1) Relying on the Shenzhen Tsinghua University Research Institute, the company uses science and innovation incubation capabilities as the core engine, focusing on strategic emerging fields such as new energy, new materials/digital economy, etc., to form the development concept of “science and technology innovation services+strategic emerging industries”; 2) Promoting base construction in an orderly manner, around the “one city, one industry” layout, it had 38 science and technology innovation bases nationwide by the end of 2022, with a total of 11 national-level incubators and creative spaces; 3) Investing in the front-end of the incubation layout and continuing to cultivate high-quality technology enterprises, including many “little giants” at the national level; Reserve projects currently in hand Many, such as Refresh Smart/Join Houpu, etc.
The three strategic emerging industries are progressing steadily. 1) Lixing Technology's OEM and export business grew steadily, accelerating the transformation and upgrading to ODM services for the entire cosmetics industry chain; 2) The Shenzhen Housing and Construction Bureau's “Building Information Model Data Storage Standard” and “Shenzhen Water Engineering Information Model Application Uniform Standard” were published and implemented, and have served many key customers such as governments/enterprises in many regions; 3) Lihe Yunji products are used in public areas such as hotels/bank branches/hospitals, etc., and launched an “antibacterial solution” series of products for personal protection.
Risk warning: project progress and results do not meet expectations, investment incubation failure, project exit risk, etc.