Events:
On the evening of August 3, the company released its 2023 half-yearly report. 2023H1 achieved revenue of 400 million yuan, down 1.01% from the same period last year; net profit from home was 53.33 million yuan, down 58.93% from the same period last year; and net profit from non-return was 47.62 million yuan, down 8.88% from the same period last year. On August 10, the company communicated with investors through the "Interactive easy" platform of the Shenzhen Stock Exchange.
Comments:
Revenue from non-EPC businesses is growing steadily. The company's 23H1 revenue declined slightly compared with the same period last year, mainly because 22H1 confirmed 148 million yuan of EPC project revenue, while 23H1 recognized only 14.37 million yuan. After excluding the EPC business, the company's core main mining rubber wear-resistant spare parts and mineral processing equipment 23H1 increased by 23.20% and 134.15% respectively compared with the same period last year, showing the high magnanimity of downstream demand. The large decline in half-year net profit is mainly due to the fact that the asset disposal of the overall relocation project of 22H1 confirmed the benefit of 81.74 million yuan in the disposal of non-current assets.
Gross profit margin rebounded slightly and is expected to show an upward trend in the future. The company's 23H1 gross profit margin was 32.39%, an increase of 1.07pct over the same period last year. Excluding overseas EPC business, 23H1's manufacturing industry accounted for 40.4% of overseas revenue, 30.4% of 23H1 22H1, an increase of 10.0pct over the same period last year. The gross profit margin of overseas wear-resistant spare parts and mineral processing equipment is higher than that of domestic, the company focuses on overseas markets, with the gradual increase in the proportion of overseas non-EPC business revenue, the company's gross profit margin is expected to show a steady upward trend.
Adequate production capacity planning, benefiting from the increased permeability of rubber wear-resistant parts. According to the investor research announcement issued by the company, the replacement rate of rubber wear-resistant spare parts in the global mineral processing link is only 10%. Rubber wear-resistant spare parts have the advantages of long life, low noise, energy saving and easy installation, the company will benefit from the improvement of rubber wear-resistant spare parts permeability in the future. The company is actively expanding its production capacity, with two production bases in Shangrao and Mongolia in Jiangxi, with a production capacity of more than 900 million; the Zambian factory will be put into production in the first half of next year, with a production capacity of 200 million to 300 million. At present, the company is doing a private placement, the construction of the second phase of the expansion project, the production capacity is expected to be 700 million; in addition, the company is also building production bases in Chile and Serbia. It is estimated that after 3 to 5 years, the production capacity of the company excluding EPC business will reach 23-2.5 billion, strongly supporting the medium-and long-term development of the company.
Profit forecast: the company is expected to achieve net profit of 0.98,1.62 and 248 million yuan from 2023 to 2025, corresponding to 30, 18 and 12 times PE. Coverage for the first time, giving a "overweight" rating.
Risk hint: the penetration of rubber wear-resistant spare parts is lower than expected; international trade risk; profit forecast and valuation model failure