Event: the company released its semi-annual performance report for 2022, with operating income of 95.979 million yuan, an increase of 36.0% over the same period last year, and a net profit of 19.202 million yuan, an increase of 127.7% over the same period last year.
Revenue has maintained high growth, and the growth rate of heating energy-saving products is eye-catching. From a product point of view, 1) the company's heating and energy-saving products maintained rapid growth, with the ultrasonic calorimeter achieving revenue of 16.314 million yuan, an increase of 22.6% over the same period last year; and intelligent modular heat exchanger units achieving revenue of 37.752 million yuan, an increase of 517.6% over the same period last year. 2) the heating energy-saving system project maintained steady growth, with revenue of 21.656 million yuan, an increase of 14.5% over the same period last year. On the profit side, the company achieved rapid growth in net profit in the first half of the year, with a net profit of 8.517 million yuan in Q2 alone, an increase of 169% over the same period last year. It is mainly due to: 1) the high increase in heating and energy-saving products; 2) the company receives government subsidies. In terms of cash flow, the operating cash flow of 2022H1 fell 36% to 130 million yuan compared with the same period last year, mainly due to the rise in the price of raw materials and the company's stock in advance.
Increasing investment in intelligent research and development, the benchmarking effect is gradually highlighted. 2022H1, the company invested 20 million yuan in R & D expenditure, an increase of 40.7% over the same period last year, and the R & D expenditure rate reached 20.6%. It further enhanced its independent R & D capability in the areas of network-wide heat balance, heating control and regulation, IoT intelligence, and AI algorithms, and strengthened competition barriers. At the same time, during the reporting period, the company signed an AI intelligent heating project contract with Zaozhuang Thermal Power Corporation, with a contract amount of 247 million yuan, which is expected to form a larger demonstration effect and accelerate the promotion of nationalization.
"double carbon" and "old" two-wheel drive, intelligent heating is imperative. In July 2020, the State Council issued the guidance on comprehensively promoting the renovation of old urban residential areas, in which heating was included as a basic category of transformation. In January 2021, the national carbon peak action plan was further deployed, emphasizing the need to actively promote heating transformation, and the demand for energy-saving heating increased significantly. In June 2022, the State Council issued a document to start the aging, renovation and renovation of urban gas and heating pipelines, which should be basically completed by 2025. As a leading enterprise of intelligent heating, the company is expected to fully benefit from the upward trend of the industry and accelerate the penetration of products and solutions.
Profit forecast and investment advice. It is estimated that the EPS of the company from 2022 to 2024 will be 2.73,3.63,4.82 yuan respectively, and the net profit of homing will maintain a compound growth rate of 29.81% in the next three years. Considering the leading performance of the company's hardware products and the rapid growth of sales; at the same time, the software platform empowers, R & D investment continues to increase, and core technology capabilities are enhanced, which is expected to fully benefit from the rising prosperity of the industry driven by the "double carbon" policy. Profitability is expected. Therefore, the company is given 20 times PE in 2023, corresponding to the target price of 72.60 yuan, giving a "buy" rating for the first time.
Risk tips: project delivery is not as expected, inventory turnover risk, industry competition intensifies, and so on.