Items:
The company released the mid-2023 report, corresponding to 2Q23 revenue of 450 million yuan, year-on-year + 47%, month-on-month + 18%, return to the mother net profit of 46 million yuan, year-on-year + 28%, month-on-month + 6%.
Comments:
Income is at an all-time high and performance exceeds expectations. Company 2Q revenue performance is better, mainly due to the rapid growth of commercial vehicles, exports, differential growth, military industry slightly lower than expected, mainly affected by the pace of settlement. In the first half of this year, commercial vehicles are estimated to be 160 million yuan / + 68%, and differential 140 million yuan / + 97%.
The performance of net profit was slightly lower than expected, mainly affected by the proportion of military business and the decline in gross profit margin. The growth rate of net profit compared with the previous month is weaker than that of income, mainly due to the gross profit margin of 29.4%, year-on-year-5.5PP and month-on-month-2.5PP, which is affected by the amount of differential (gross profit margin has not reached a stable stage), the proportion of military income has decreased, and the gross profit margin of military industry has been affected by changes in the structure of settlement products. In addition, on the expense side, the management, sales and research is relatively stable, but the financial expenses are affected by the interest provision of convertible bonds (starting from 1Q). The final net interest rate of the company is 10.2%, year-on-year-2.3PP, month-on-month-1.2PP.
The development of new products is progressing steadily, and the new growth line is opening rapidly:
1. Differential ushered in the formal expansion this year: in recent years, the company has launched the layout of the whole industry chain of differential, including shell casting, machining, half-tooth forging, heat treatment and assembly assembly. At present, it has realized the project / cooperation of traditional car companies such as Volkswagen, Dongfeng, Geely and Great Wall, as well as new energy vehicle companies such as NIO Inc., ideal, BYD and North American electric vehicles. The income of the differential business was 120 million yuan last year and 140 million yuan in the first half of this year. It is expected that with the self-made differential shell switching in the second half of the year, the annual income will be about 400 million yuan. At the same time, the gross profit margin is expected to increase significantly from 4% last year, improving the overall performance of the company.
two。 Electrification second business motor shaft and other products began to layout: in addition to the differential business, the company has planned motor shaft projects and other projects to better grasp the trend of electrification. If the business develops smoothly in the future, it is estimated that the total volume is expected to exceed traditional businesses such as synchronizers.
3. Comprehensive expansion of the product line of military business: the company currently has four companies: Hao Yiqiang, Hengyisheng, Haoneng Aerospace and Aerospace Shenkun, covering two major sectors of aviation and spaceflight. as well as aircraft sheet metal parts, aircraft processing parts, aircraft outfield modification, rocket special valves, pipelines, connectors and other diversified product business. In 2022, Hao Yiqiang's revenue is 190 million yuan / + 40%, and the net profit is 77 million yuan / + 81%. It is expected to be affected by the settlement rhythm of downstream customers this year, it is expected to return to its previous state in the second half of the year, and it is expected to maintain rapid growth next year.
Investment advice: the company's traditional business is boosted by the volume of commercial vehicles this year. In addition, the differential increases rapidly, the military business grows steadily, and the company's revenue end is expected to maintain rapid growth, with growth rates of 24%, 27% and 21% respectively from 2023 to 2025. Considering that three new businesses are still in the capacity investment period, the profitability of the differential business is in the climbing stage, and the new interest on convertible bonds has been added this year, we have lowered the company's 2023-2024 net profit forecast from 230 million, 270 million and 400 million yuan to 190 million, 260 million and 380 million yuan, with a growth rate of-11%, + 37% and + 47%. The corresponding PE is 23 times, 16 times and 11 times. Combined with the past valuation of the company, the valuation level of the industry as a whole, and the further enrichment and acceleration of the company's new business development, the 2023 target PE is given 25 times, and the target price is adjusted to 12.0 yuan accordingly, maintaining the "recommended" rating.
Risk tips: new product rhythm and sales are lower than expected, fuel vehicle sales are lower than expected, material prices fluctuate, and so on.