Incident: Runbang Co., Ltd. announced its 2022 annual report. 2022 full year:
1) Achieved revenue of 5.174 billion yuan, +34.51% year on year; achieved net profit of 303 million yuan, -84.79% year-on-year; realized net profit of -181 million yuan, -163.41% year-on-year; 2) Annual gross profit margin 19.86%, year-on-year -5.476pct; net interest rate 1.90%, year-on-year -7.86pct; 3) Expense rate for the period was 11.77%, year-on-year -2.50pct, sales/management/R&D/finance expenses ratios were 1.78%, 5.39%, 4.50%, 0.50, respectively %, year-on-year changes of -0.48, -0.98, -0.06, and -0.98 pct, respectively.
2022Q4：
1) Achieved revenue of 2,255 million yuan, +134.68% year-on-year, +82.03% month-on-month; realized net profit of -115 million yuan, -236.28% yoy, -350.40% month-on-month; realized net profit of -343 million yuan after deducting non-return to the mother, -793.39% year-on-year, -825.79% month-on-month;
2) Q4 single-quarter gross profit margin was 18.39%, year-on-year -10.28pct, -1.20pct month-on-month; net interest rate -3.8382%, year-on-year -14.17pct, -7.927pct month-on-month.
By product: In '22, the company's material handling equipment/marine engineering equipment and ancillary equipment/hazardous waste medical waste disposal achieved revenue of 24.17/11.89/607 billion yuan respectively, +82.91%/-10.17%/-4.00% over the previous year; gross margin was 17.82%/12.99%/40.59 percent, respectively +0.38/-6.03/-7.47pct respectively over the previous year.
International business has gradually developed, and international competitiveness has continued to improve: the company has focused on overseas market development in recent years. International sales in '22 were +72.79% year on year, and revenue was +8.67 pct year on year, supporting the company's overall performance under the trend of slowing domestic revenue growth; it is expected to continue to enhance the company's revenue side performance in the future. In '22, Runbang Industrial initiated the acquisition of the Kalmar (Kalmar) port container crane business of Finland's CARGOTEC CORPORATION and completed the relevant agreement in July '22. This move will further promote the company to explore the global port container crane market and promote the pace of the company's international business development.
The wind power business has outstanding technical advantages and is progressing steadily in line with the trend of localization: the company independently developed and designed the first domestic self-elevating wind power installation platform “Huadian 1001” suitable for offshore wind power. Its subsidiary, Runbang Ocean, has the production capacity to supply 300,000 tons of offshore wind power foundation piles and conduit frames to the market every year. Runbang Marine has become a leading enterprise in this field, and successfully won the company's first overseas offshore wind power project order in '22, which is an important step in implementing the company's offshore wind power equipment business plan.
The results of the acquisition fell short of expectations, or increased profit risk; the company's subsidiary, Nantong Runhe, currently holds 100% of the shares of Hubei CNPC Youyi Environmental Technology Group Co., Ltd. and 70% of Jiangsu Luwei Environmental Technology Co., Ltd. As development fell short of expectations, the loss of goodwill attributable to shareholders of the parent company caused by Hubei CNPC and Nanjing Greenway was 479 million yuan and 1.99 million yuan respectively, leading to a sharp decline in profits in the fourth quarter. In particular, CNPC Environmental Protection's operating performance in 2022 was poor, and performance promises were not fulfilled. At the same time, production capacity in the environmental protection industry in which it is located increased, market competition intensified, and hazardous waste disposal prices dropped sharply. This has had a negative impact on the profitability of CNPC's environmental protection, and there is still a risk of impairment of goodwill in the future.
Profit forecast: Considering that the results of the company's acquisition fell short of expectations and may continue to have a negative impact on future performance, we lowered the company's profit forecast. The company's net profit for 23-24 is estimated to be 284 million yuan (previous value: 329 million yuan) and 334 million yuan (previous value: 414 million yuan), corresponding PE was 18.36 and 15.64X respectively, adjusted to the “hold” rating.
Risk warning: risk of worsening macroeconomic environment, risk of market competition, risk of contract performance, risk of failure to meet performance commitments, risk of business integration, etc.