Event: Tongfei Co., Ltd. released a half-year report on 2023: 23H1 achieved operating income of 705 million yuan, an increase of 75.65% over the same period last year, and net profit of 67 million yuan, an increase of 38.85% over the same period last year, deducting 58 million yuan of non-return net profit, an increase of 61.36% over the same period last year. 23Q2's operating income was 432 million yuan, up 102.27% over the same period last year, and its net profit was 39 million yuan, an increase of 41.62% over the same period last year. The non-return net profit was 35 million yuan, an increase of 60.65% over the same period last year.
Comments:
The performance of the main products has grown steadily, and the energy storage temperature control business has been greatly expanded. 2023H1, the company's main product liquid thermostat / electric box thermostat / pure water cooling unit respectively achieved revenue of 4.55 million yuan, up 89.88% and 41.18% and 54.85% respectively over the same period last year, showing a trend of rapid growth. At the same time, the company already has strong R & D capability and capacity scale in the field of energy storage temperature control. 2023H1's operating income in the field of energy storage temperature control is about 249 million yuan (the annual revenue of 2022 is about 158 million yuan), relying on the high quality of products and liquid cooling temperature control advantages accumulated in the numerical control equipment and power electronics industry to further expand the energy storage temperature control market.
Gross profit margin increased slightly compared with the same period last year, while net profit margin fell slightly. 2023H1, the company's overall gross profit margin is 26.49%, year-on-year + 1.33pct. Among them, the gross profit margin of liquid thermostat equipment business is 24.39%, year-on-year + 1.35pct; electric box thermostat business gross profit margin is 28.25%, year-on-year + 3.23pct. On the one hand, the improvement of gross profit margin comes from the scale effect brought by the rapid growth of revenue, on the other hand, it is mainly due to the optimization of product design and the improvement of product technology. 2023H1, the company's overall net interest rate is 9.51%, year-on-year-2.52pct. It is mainly due to the improvement of the rate of R & D expenses and the amortization of equity incentive expenses.
Increase investment in R & D and broaden the range of products of the company. 2023H1, the company's R & D expenditure was 37 million yuan, an increase of 121.1% over the same period last year. During the reporting period, the company continued to expand new application fields (such as semiconductors, hydrogen energy, etc.). In the field of semiconductor manufacturing, domestic substitution and the improvement of market share are the main growth lines of Chinese enterprises in this field. The company has expanded many high-quality customers by virtue of its good industry reputation and a number of independent intellectual property rights. In the field of hydrogen energy, upstream hydrogen production and downstream hydrogenation have extremely high requirements for temperature control. With years of deep ploughing in the industrial temperature control field, the company also occupies a certain market share. The introduction of new products will help to broaden the company's profit sources and enhance market competitiveness.
Earnings forecast, valuation and rating: taking into account the orderly progress of the company's business, we maintain the company's 23-25 year net profit forecast of RMB 2.410 million, respectively. The current share price corresponds to PE times 28-21-15.
Taking into account the accelerated development of the energy storage industry and the rapid improvement of liquid-cooled permeability, we are optimistic about the future of the company and maintain the "buy" rating.
Risk hint: the development of energy storage industry is less than expected risk, and the competition in energy storage temperature control industry aggravates the risk.