Events:
According to the 2023 semi-annual report released by Yaxang Integration, the company realized a net profit of 74.18 million yuan during the reporting period, an increase of 236.66% over the same period last year, and an operating income of 931 million yuan, a decrease of 3.81% over the same period last year.
Comments:
The income structure has improved and the profitability has been enhanced. The company's net profit in the first quarter was 32.62 million yuan, an increase of 544.09% over the same period last year, and the net profit in the second quarter was 41.56 million yuan, an increase of 144.90% over the same period last year. In addition, the company's income structure improved, the operating income of the engineering construction business was 581 million yuan, down 36.13% from the same period last year, accounting for 62.36%, and the operating income from equipment sales was 342 million yuan, an increase of 566.85% over the same period last year, accounting for 36.77%. The income structure has been improved.
The operation is sound and effective, and the gross profit margin has improved. The overall operating situation of the company has improved steadily. In the first half of the year, the company's comprehensive gross profit margin was 13.87%, an increase of 4.96pct over the same period last year. The gross profit margins of engineering construction and equipment sales business were 9.73% and 19.59% respectively, and the profitability of the main business increased. This is mainly due to the stabilization of the price of raw materials required by the project, the reduction of labor costs, and the effective control of costs by the company. At the same time, there was a considerable improvement in cash flow in 2023. The net operating cash flow in the first half of the year was 817 million yuan, continuing the excellent trend of operating cash flow in the first quarter. Accounts receivable decreased by 45.45% compared with the end of the previous year. The balance sheet was further improved and the sustainable operation ability was enhanced.
The industry is picking up, orders are abundant, and the momentum of development is strong. Benefiting from the expansion and acceleration of chip production, the current scale of the industry has exceeded 200 billion. As a private leader in the industry, the company accounted for 95% of the revenue of the electronics industry last year. In addition, it has a strong momentum of development through long-term and stable cooperation with high-quality enterprises such as Taiwan Semiconductor Manufacturing Co Ltd and Semiconductor Manufacturing International Corporation. Up to 630 caliber, the company has 51 outstanding projects on hand, with a total amount of 7.007 billion yuan, which is 2.31 times of the company's operating income in 2022. In addition, the company's contract liabilities in the first half of the year increased by 294.96% to 784 million yuan compared with the end of 22 years, while other current liabilities increased by 290.14% to 60.3656 million yuan compared with the end of 22 years. The order is full and the performance is worth looking forward to.
Coverage for the first time, giving the company an overweight rating. It is estimated that the company's net profit from 2023 to 2025 will be 2.62 million yuan and 340 million yuan, respectively, and EPS1.23/1.40/1.59 yuan will be realized. The corresponding PE will be 13.69, 12.01 and 10.54 times.
Risk tips: project promotion, downstream demand is lower than expected, valuation and performance forecast are not as expected