Event: the company released its semi-annual report for 2023, with an operating income of 686 million yuan in the first half of 2023, + 9.88% compared with the same period last year, and realized net profit / deducted non-return net profit of 0.72 billion yuan, which was 19.90% higher than that of the same period last year. From a quarterly point of view, 2023Q2 realized operating income / return net profit of RMB 360 million RMB 0.67%, respectively, compared with the same period last year, and 51.42% compared with the same period last year.
Expand the application field of industrial membrane, develop large-flux household membrane, and the revenue of membrane products continues to grow. In terms of industrial membrane, since 2023, the industrial economy has gradually repaired and superimposed water-saving policies have been continuously promulgated, promoting the growth of industrial membrane demand, the company has grasped the trend of localization of the membrane industry, and has continued to make efforts in the fields of industrial water use, special concentration and separation, and seawater desalination, and the sales volume of industrial film has increased well. In terms of household membranes, the company has strengthened cooperation with major water purifier manufacturers to continue to promote the upgrading of high-end and high-throughput product consumption.
In the first half of 2023, the operating income of membrane products was 433 million yuan, + 16.21% compared with the same period last year; the gross profit margin was 38.55%, year-on-year-0.34pct.
The operation of the reclaimed water reuse project is stable, and the membrane separation needs to be further converted. The company's production capacity of the reclaimed water reuse project continues to release, and the operational efficiency continues to improve. at the same time, the company ploughs the membrane separation business and obtains a number of project orders such as lithium extraction from salt lake and zero discharge of iron phosphate wastewater. and achieved zero breakthrough in overseas salt lake lithium membrane separation project orders. In the first half of 2023, the operating income of reclaimed water reuse was 28.2926 million yuan, + 6.28% compared with the same period last year, and the operating income of membrane separation was 8.9656 million yuan. At present, the outstanding order amount of the company is 180 million yuan, some of which are membrane separation orders. it is expected that with the gradual progress of project completion and acceptance, membrane separation revenue is expected to increase significantly in the second half of the year.
The new production capacity is expected to be put into production in the second half of the year, opening the growth ceiling. At present, the design capacity of the company's membrane products is 23.3 million tons, and the actual achievable capacity is 30 million tons. Since 2023, the production capacity has basically reached full production. The third phase of the Shawen Industrial Park project is expected to be completed in the second half of 2023. If it is successfully put into production, it will form a production capacity of 4.8 million tons of polyamide composite reverse osmosis membrane materials, 40,000 seawater desalination reverse osmosis membrane modules and 1.45 million high-flux reverse osmosis membrane modules, opening up the growth ceiling for the company.
Actively respond to the downturn in the industry, plant fiber products business as a whole stable. The household industry is in the doldrums as a whole, the mattress industry is showing a trend of integration, the integrated development of the whole category and assembly of furniture has an impact on a single category of furniture manufacturers, the company actively opens up sales channels, continues to reduce costs and increase efficiency, and the overall performance of plant fiber is stable. In the first half of 2023, the company's plant fiber products achieved business income of 192 million yuan, year-on-year-5.86%; gross profit margin 38.57%, year-on-year + 3.29pct.
Profit forecast: from 2023 to 2025, we expect the company to achieve an operating income of 1.612 billion yuan and a net profit of 1.68 billion yuan. The company will achieve a net profit of 2.01 billion yuan, corresponding to 26.77x/22.31x/18.84x, which will be covered for the first time and will be rated as "overweight".
Risk hints: the macro situation at home and abroad has changed more than expected, competition in the industrial film and plant fiber industry has intensified, the process of import substitution is not as expected, the acquisition of orders is not as expected, and profit forecasts and valuation models are not as expected.