23H1's homing net profit increased by 18.22%, maintaining its "buy" rating

The company released its 2023 semi-annual report, with revenue of 623 million yuan in the reporting period, down 3.06% from the same period last year, and net profit of 249 million yuan, an increase of 18.22% over the same period last year. Of this total, 23Q2 realized a net profit of 114 million yuan, an increase of 103% over the same period last year. Due to the adjustment of the purchase plan of the customers downstream of the company's testing and testing business, we downgrade our profit forecast, and we expect the company's 23-25 year net profit to be RMB 454 million (the previous value is RMB 725 million). The corresponding PE was as much as in 30-22-16. According to the Wind consensus expectation, the comparable company 23 years average PE is 47X, gives the company 23 years PE47X, corresponds to the target price is 64.39 yuan (the previous value 55.30 yuan), maintains the "buy" rating.

The main business of aircraft landing system increased steadily, and the testing and testing business declined under the influence of downstream customers.

In the first half of the year, the company's main aircraft landing business achieved income of 424 million yuan, an increase of 11.34% over the same period last year, of which the aircraft brake control system and wheel business reached 354 million yuan, an increase of 0.09% over the same period last year, which basically remained stable; the brake disc (deputy) business achieved an income of 65.6671 million yuan, an increase of 154.01% over the same period last year. The main reason for the substantial growth of the brake disc business is that the company's civil aviation business permeates quickly and the market development is better. The electronic components testing and testing business in charge of subsidiary Jing Hanyu achieved business income of 195 million yuan, down 24.62% from the same period last year, mainly due to the phased adjustment of downstream customer procurement plans and changes in the prosperity of the electronic components testing industry market.

Overall gross profit margin fell slightly and operating net cash flow returned to positive.

The company's overall gross profit margin in the first half of the year was 68.39%, a decrease of 0.8pct compared with the same period last year. According to the company's aircraft brake control system and wheel business, the gross profit margin of the company's aircraft brake control system and wheel business is 66.84%, which is 1.52 pct lower than that of the same period last year; the gross profit margin of testing and testing business is 67.38%, which is 6.29 pct lower than that of the same period last year; and the gross profit margin of brake disc (secondary) is 84.64%, which is an increase of 2.03pct over the same period last year. The net cash flow generated by the company's operating activities in the first half of the year was 29.95 million yuan, compared with-209 million yuan in the same period last year, mainly due to better payback and more VAT rebates.

End the high-speed rail brake pad industrialization fund-raising project, continue to power the main business of aviation landing system

The company announced that due to the change of the market environment, according to the development strategic plan, the company intends to terminate the fund-raising project "industrialization Project of basic friction Materials and Brake pads for High Speed Trains" and use the savings to permanently replenish liquidity to cope with the landing gear landing system and civil aviation market with larger market space, stronger profitability and better competition pattern in the future. At present, the company actively develops the application of brake discs in the civil aviation market, and has achieved remarkable results, and the civil aviation business is growing rapidly compared with the same period last year. At the same time, the company is also constantly promoting the production capacity construction of brake disc, wheel and landing gear landing system, focusing on the development of the core main industry, in order to cope with the demand of the military industry in the second half of the 14th five-year Plan in the future. Follow-up civil aviation business and landing gear business are expected to become an important part of the company's business in the future.

Risk tips: high customer concentration risk; slow civil aircraft business expansion risk.