Zhen'an Science and Technology released its semi-annual report of 2022: 2022H1, the company's operating income was 431 million yuan, an increase of 29.86% over the same period last year, and its mother's net profit was 55 million yuan, down 16.47% from the same period last year.
Main points of investment
The increase in expenses and the impairment loss led to a more decline in Q2 performance. In 2022, Q2 operating income / return net profit was 203 million yuan / 22.09 million yuan respectively, compared with the same period last year. + 0.12% net profit 37.8%. The main reasons for the return net profit are: 1) the increase in expenses during the period. The company's Q2 sales expenses and R & D expenses in 2022 were + 21.3% and 72.6% compared with the same period last year, while the financial expenses changed from a profit of 4.689 million yuan to a loss of 5.233 million yuan. The increase in sales expenses is caused by the expansion of the marketing network, and the increase in financial expenses comes from new financing projects for production expansion; 2) the increase in overall income in the first half of the year + the epidemic affects the overall payback speed of the industry, resulting in a loss of 15.28 million yuan in the company's Q2 credit impairment.
From the perspective of profitability, 2022H1's gross profit margin is 42.5%, of which 2022Q2 gross profit margin is 48.10%, which is respectively higher than the same period of last year / month-on-month 0.93pct/10.61pct. From a product point of view, the gross profit margin of 2022H1 isolation product / isolation system is 42.82% and 40.16% respectively, which is higher than that of 2021H2 by 5.57pct/6.64pct, and the month-on-month improvement is significant.
The net operating cash turned positive, and the operating efficiency decreased under the influence of the lower reaches. The 2022Q2 net operating cash flow of the company was 76 million yuan, an increase of 196.90% over the same period last year. The main reason was that the cash received by the company in selling goods and providing services increased by 165.52% compared with the same period last year. At the same time, the cash-to-cash ratio of Q2 was 1.16x, and the net cash ratio was 2.42x, and the marginal gold content of the operation was improved.
The size of the company's 2022Q2 inventory rose to 295 million yuan, an increase of 55.27% over the same period last year. The number of inventory turnover days was 231 days, an increase of 45 days over the same period last year, mainly due to inventory overstocking caused by underemployment downstream. In the first half of the year, accounts receivable and bills totaled 652 million yuan, an increase of 31.38% over the same period last year, which matched the growth rate of revenue.
Sufficient production capacity and remarkable results in cross-regional layout
In terms of production capacity, in August 2022, the company plans to increase by nearly 250 million yuan, and the funds raised will mainly be used for capacity expansion, enhance R & D capacity, improve marketing network and optimize capital structure. The company plans to increase the production capacity of 30,000 sets of intelligent dampers, 5050 sets of hydraulic dampers for nuclear power plants and 7500 sets of accessories, which is expected to further enhance the competitiveness of products in the field of nuclear power. On the sales side, the company's sales channel expansion focuses on the southwest, radiating South China and Northwest China: 2022H1 South China shock absorption product revenue increased to 83.34 million yuan (year-on-year + 572%), higher than 2021 annual revenue of 3.488 million yuan in South China. The income of the northwest region is 99.2 million yuan (year-on-year + 107.7%). The effect of the national layout of the company is remarkable.
Profit forecast
Regardless of the impact of additional issuance on performance and equity, we predict that the return net profit of the company from 2022 to 2024 will be 2.49,5.15,830 million yuan respectively, EPS 1.23,2.55,4.11 yuan respectively, and the current stock price corresponding to PE is 48,23.3,14.4 times, maintaining the "buy" investment rating.
Risk hint
1) the size of the shock isolation market is lower than expected; 2) the progress of additional issuance is not as expected; 3) the progress of project construction is not as expected; 4) the gross profit margin of the main industry is declining.
