Main points of investment
Event: according to the company's semi-annual report for 2023, H1 achieved an operating income of 399.91 million yuan in 2023, a decrease of 1.01% over the same period last year, and a net profit of 53.33 million yuan, down 58.93% from the same period last year.
The company H1 mine rubber wear-resistant spare parts contributed 252 million yuan in operating income, an increase of 23.20% over the same period last year, and a gross profit margin of 37%, a decrease of 0.3%. Mineral processing equipment business contributed revenue of 65.02 million yuan, an increase of 134.15% over the same period last year, and a gross profit margin of 22.58%, an increase of 0.13% over the same period last year. The revenue contributed by mineral processing system programs and services was 14.37 million yuan, a decrease of 89.96% over the same period last year, and the gross profit margin was 5.2%, a decrease of 19.4% over the same period last year.
Performance reversal, management, sales expense rate has increased: the company Q1 in 2023 is in a state of loss, the current return net profit is-12.95 million yuan, according to the company's semi-annual report, the company performance in Q2 to achieve a strong reversal, in the context of Q1 losses to drive the overall performance of the first half of the year to achieve rapid growth. The sales expense rate of 2023H1 Company was 6.23%, an increase of 2.26% over the same period last year, mainly due to the increase in the company's business, business expenses and travel expenses, while the management expense rate was 14.5%, an increase of 4.01% over the same period last year, mainly due to the increase in employee stock ownership plan share payment expenses, employee salary expenses and fixed assets depreciation expenses. The financial expense rate was-6.26%, down 6.05% from the same period last year, mainly because the company had more overseas business and was affected by fluctuations in the exchange rate of the US dollar.
The company has a rich range of products, R & D investment continues to increase, with mineral processing equipment and materials application first advantage. The company has hundreds of rubber wear-resistant mineral processing equipment and spare parts, including grinding rubber wear-resistant series (mill liner, cylinder screen, sieve plate), pulp transportation rubber wear-resistant series (slurry pump, cyclone and pipeline), flotation rubber wear-resistant spare parts series and so on. At present, the company's polymer wear-resistant materials research is mainly rubber, through years of technical accumulation and research, according to different working conditions and mineral processing equipment characteristics, has developed more than ten kinds of rubber mixing formula, different kinds of mixed rubber research and development of rubber refining, vulcanization process, but also equipped with a full set of rubber testing equipment to ensure the stability of material properties. In 2023, H1 invested a total of 14.15 million yuan in R & D expenditure, an increase of 50.22% over the same period last year. High R & D investment ensures that the company maintains a leading edge in iterative product updates and new material applications.
"Belt and Road Initiative" helps to open up overseas markets, and the potential of overseas markets is gradually realized. The company's overseas customers are mainly concentrated in "Belt and Road Initiative" countries, such as Central Asia, Eastern Europe, South America, Africa and other places are friendly to China and rich in mineral resources. The change of the international environment has brought great opportunities to the company, which will bring great help to the contract signing of the company in the current and future. We judge that with the continuous increase in the proportion of overseas business, the company's profitability will also improve steadily.
Investment suggestion: considering that the company is the leader of domestic rubber wear-resistant parts, rubber wear-resistant spare parts are expected to gradually replace traditional metal spare parts, the company as a leader will fully benefit, and the company will actively open up overseas markets. Will fully benefit from the high-quality overseas business brought about by the promotion of "Belt and Road Initiative". We maintain the profit forecast of the company for 23-25 years, and forecast that the operating income of the company from 2023 to 2025 is 11.57,15.55 and 1.95 billion yuan respectively, and the net profit is 0.94,1.55 and 238 million yuan respectively. Corresponding to the stock price on August 3, the EPS is 0.90,1.48,2.27 yuan respectively, and the PE valuation is 30.5,18.6,12.1 times respectively.
Risk tips: the penetration of rubber wear-resistant spare parts is lower than expected, overseas customer development is not as expected, industry competition is intensified, changes in the international political and economic environment, etc.