2023H1 performance is lower than we expected.
Jingye Intelligence announced results: 2023H1 operating income / homing net profit fell 37.7% to 0.93 trillion yuan compared with the same period last year, mainly due to the delay in the delivery process of orders in the nuclear industry, resulting in sharp fluctuations in the first half of the year, which was lower than we and the market expected.
During this period, the expense rate has increased significantly. 1) from a business point of view, the revenue of intelligent equipment / robots / non-nuclear special equipment in the nuclear industry in the first half of the year was RMB 7873 million, compared with 12.7%, 91.3% and 406.6% over the same period last year. 2) in the first half of the year, the company's gross profit margin increased by 3.6ppt to 51.2% compared with the same period last year, but due to the small revenue base and the sales / management / R & D expense rate showing + 3.9/+10.5/+14.6ppt, the net profit margin fell 12.6ppt to 11.3%.
It is planned to invest in West Nuclear equipment and expand it. In August, Jingye Intelligence issued a foreign investment announcement that it intends to hold a 5 per cent stake in West Nuclear equipment for no more than 66 million yuan. West Nuclear equipment is a wholly-owned subsidiary of China Nuclear Puyuan. According to the announcement, West Nuclear equipment has a revenue of 1.68 billion yuan in 2022, with a net profit margin of 3%. It is the only domestic manufacturer with a full set of nuclear fuel operation and storage system (RFH) equipment. This investment shareholding will help to deepen the China Nuclear Cooperation system.
It is easy to increase the end of release and deepen the application of the nuclear industry. In July, the company completed the issuance of a simple fixed increase. According to the announcement, the issue price was 63.77 yuan per share, with a net fund of 200 million yuan. The "high-end nuclear technology and equipment manufacturing base" project has a construction period of 2 years, with nuclear power plant reactors, radioactive waste treatment and disposal as reserve projects, and the company is expected to be put into use in early 2025.
Trend of development
Research and development of humanoid intelligent working robot. According to the announcement, as of the first half of the year, the company's technical R & D personnel accounted for about 42%, 5 people with doctor's degree or above, and 10 senior engineers. Relying on the "Zhejiang University-Jingye Intelligent Nuclear Industry Advanced Technology Joint Research and Development Center", the company and Zhejiang University, Zhijiang Laboratory and other units layout humanoid intelligent work robot. We believe that humanoid intelligent operating robots have rigid demand scenarios in special fields such as nuclear industry, and landscape intelligence has better technical genes.
Profit forecast and valuation
Due to the delayed delivery of orders in the nuclear industry than expected at the beginning of the year, we reduced the net profit in 2023 by 9.8% to 135 million yuan. Due to the increase in the company's phased reserve business investment, we reduced the net profit in 2024 by 2.2% to 200 million yuan. The current price corresponds to the 2023 amp 2024 Pamp E is 37.9 pm 25.5x. We lowered the company's target price (excluding rights) by 23% to 58.8 yuan, corresponding to 30x for 2024, corresponding to a 17.3% increase, and maintained an industry rating that outperformed.
Risk
The risk of income fluctuation in a single quarter, the bidding of the nuclear industry is not as expected, and so on.