Introduction to this report:
The company's 2022 performance is in line with expectations. In the context of “carbon peaks”, demand for smart heating needs to be implemented urgently. The company has a full software and hardware layout, and is optimistic about long-term development.
Key points of investment:
Maintaining the “increase in holdings” rating, the target price was raised to 114.6 yuan. Based on the downward profit forecast based on the speed of project progress, the company is expected to achieve net profit of 2.84 (-0.28) /4.06 (-
0.08) /533 million yuan, and EPS was 3.82 (-0.38) /5.46 (-0.11) /7.17 yuan respectively.
Give 30 times PE for 2023, raise the target price to 114.6 yuan, and maintain the “increase in holdings” rating.
The performance was in line with expectations, and the growth trend continued in Q4. The company achieved revenue of 647 million yuan (YOY +22%) in 2022, net profit of 201 million yuan (YOY +17%), and net profit of 164 million yuan (YOY +16%) after deduction, in line with market expectations, and maintained positive growth despite the combination of adverse external factors. In the first quarter of 2023, the company achieved revenue of 33.55 million yuan, an increase of 6.9% over the previous year; achieved net profit of 6.7668 million yuan (YOY -37%), and achieved net profit of 1,2639 million yuan after deduction, turning a loss into a profit.
Gross margin is stable, and investment in R&D continues to be high. The company's gross margin in 2022 was 54.77%, down 0.3 percentage points from the previous year. In terms of period expenses, the company's expenses rate during 2022 was 15.52%, an increase of 1.38 pcts over the previous year; among them, R&D expenses increased 49% year-on-year, mainly due to the increase in personnel. The trend of high R&D investment also showed confidence in the company's future development.
There are sufficient orders in hand, and demand for smart heating has not decreased. Heating transformation is an important part of the “2030 carbon peak”, and industry-related policies are issued frequently. We expect the total size of the new construction and transformation market to reach 100 billion dollars. Currently, the penetration rate is extremely low; Rena Intelligence, which has a comprehensive layout of software and hardware products, will fully benefit. By the end of 2022, the company's performance obligations were 455 million yuan, and there were also 200 million yuan in consortium contracts. Adequate orders on hand also laid a good foundation for the company's rapid development.
Risk warning. Demand fell short of expectations, and the risk of expansion outside the province fell short of expectations.