Items:
During the reporting period, the company achieved 637 million yuan in main income, down 5.42 percent from the same period last year; the net profit returned to the mother was 82.1333 million yuan, down 48.05 percent from the same period last year; the single Q2 company achieved 339 million yuan in revenue, down 5.58 percent from the same period last year; and the net profit returned to the mother in a single quarter was 53.8895 million yuan, down 32.63 percent from the same period last year.
Comments:
Revenue fell slightly and gross profit margin dragged down performance. 2023H1's environmental monitoring system / system transformation and operation and maintenance services / gas analyzers and spare parts business achieved revenue of 3.49 million yuan, respectively, down 11.16%, 11.33% and 18.05%, respectively, compared with the same period last year. Industrial process analysis system and energy conservation and environmental protection engineering business performed well, achieving revenue of 0.55 billion yuan, an increase of 111.52% and 159.46% respectively. The company's performance is lower than the original expectations, we think the reasons are as follows: 1) the macroeconomic downward pressure is greater, the domestic environmental monitoring market demand is weak and competition is intensified, the company's revenue fell slightly by 5.42% compared with the same period last year, but the gross profit margin fell to 41.92% from 47.71% last year. 2) due to the significant increase in the frequency of travel after the epidemic, the company's sales expenses increased by 16% compared with the same period last year, accounting for 13% of revenue, up from 10.64% last year.
Operating cash flow has improved significantly. During the reporting period, the net cash flow generated by the company's operating activities was 93.7841 million yuan, a substantial increase of 129.48% over the same period last year. It is mainly due to the increase in customer repayment, the increase in payment received in the current period and the decrease in payment to suppliers. In the context of greater economic pressure on downstream customers, the company's operating cash flow can still be improved, highlighting the effectiveness of the company in money recovery work.
Overseas performance is eye-catching, and the business of scientific instruments is advancing steadily. 2023H1's overseas business achieved an operating income of 55.3685 million yuan, an increase of 39.61% over the same period last year. We believe that this is due to the market recognition of scientific instruments independently developed and manufactured by the company and its subsidiaries, which has great potential for development in the future.
The market volume of carbon monitoring instruments is just around the corner. 1) at the May regular meeting of the Ministry of Ecology and Environment on May 29, 2023, Jiang Huohua, Deputy Director of the Department of Ecological Environment Monitoring of the Ministry of Ecology and Environment, said that the pilot work of carbon monitoring was progressing smoothly and the first phase of the pilot task had been completed in an all-round way. the Ministry of Ecology and Environment will strengthen overall planning and coordination and step up efforts to launch the second phase pilot. 2) at the same time, Xuedilong holding subsidiary Zhongji carbon sinks jointly developed an online measurement and monitoring system for ship carbon emissions, and completed the trial operation of the first set of the system, which is expected to bring new performance increments for the company in the future.
Investment advice: maintain the "push" rating, with a target price of 11 yuan in 2023. Due to the lower-than-expected performance of 23H1, we lowered our profit forecast for the company: it is estimated that the net profit of the company from 2023 to 2025 will be 300 million yuan, 379 million yuan and 461 million yuan respectively (the previous value is 3.44,4.21 and 502 million yuan), corresponding to 18 times, 14 times and 12 times of PE respectively. We select Xue Dilong's main competitors in the field of environmental monitoring instruments, Juguang Technology, Wanyi Technology and Lihe Technology as comparable companies, considering that the combination of technology and domestic products of the company's overseas scientific instruments subsidiaries is still in the early stage, give the company a target of 23 times PE in 2023, corresponding to the target price of 11 yuan.
Risk tips: the promotion of relevant policies is not as expected, the domestic industrialization of technology in overseas subsidiaries has failed, the market competition is fierce, and the G-end business has declined.