The company released its 2023 mid-year report. 2023H1's revenue was 705 million yuan, a decrease of 18.1%; net profit from the same period was 70 million yuan, an increase of 4.4%. The company's profitability increased slightly, and the scale of impairment losses declined. The company has been deeply involved in the field of prefabricated buildings and BIM for many years, and is expected to open up new growth space in the industrialization and digital transformation of construction. Maintain the company's buying rating.
Key points to support ratings
Revenue declined, and net profit increased slightly: 2023Q2's revenue was 448 million yuan, a decrease of 7.5%; net profit of Gimu was 66 million yuan, a decrease of 7.0%. 2023H1 Company's net operating cash flow was -10 million yuan, and the net outflow scale was drastically reduced by 94.2% year-on-year. 2023Q2 Net operating cash flow was $93 million, and the net outflow increased by 277.43% year-on-year. The company's cash flow performance in the first half of the year was mainly due to the company's sales repayment, increased collection and payment, and control of various costs and expenses.
Profitability increased slightly, and the scale of impairment losses declined: 2023H1's gross margin was 27.19%, an increase of 0.87 pct; return net interest rate was 9.94%, an increase of 2.14 pct. The gross margin of 2023Q2 was 34.44%, an increase of 0.22 pct; the net profit margin of the return mother was 14.74%, an increase of 0.07 pct. The cost rate of the 2023H1 company during the period was 16.26%, an increase of 0.71 pct. Among them, the sales/management/R&D/financial expenses ratio changed year-on-year - 0.01/0.09/0.48/0.15 pct, respectively. 2023H1 calculated credit impairment losses and asset impairment losses totaling 111 million yuan, a sharp decrease of 69.0% over the previous year.
The share of prefabricated orders has further increased, and the business structure continues to be adjusted: 2023H1's architectural design business signed 939 million yuan, an increase of 19.85%, of which 598 million yuan was signed for prefabricated design, an increase of 73.26%, accounting for 63.69% of architectural design business contracts; cost consulting business signed a new contract of 105 million yuan, a decrease of 22.60%; and new contracts for general engineering contracting and full-process engineering consulting were 115 million yuan, a decrease of 54.32%. The share of revenue from 2023H1's architectural design and cost consulting business increased by 3.26 pct and 0.69 pct, respectively, over the same period last year. The share of general engineering contracting and full-process consulting services declined by 2.04 pct and 2.02 pct, respectively, over the same period last year. The decline in the share of general engineering contracting and full-process consulting services with low gross margin is conducive to a further increase in the company's overall gross margin level.
Having been deeply involved in the industry for many years, prefabricated construction and BIM have opened up room for growth: as one of the first companies to carry out research on prefabricated building design and BIM technology, the company has rich research experience and results. In the future, the company will continue to strengthen research and development in the fields of prefabricated buildings, BIM, green construction, dual carbon, artificial intelligence, etc., which is expected to open up new growth space in the process of construction industrialization and digital transformation.
valuations
The company's performance for the first half of the year was basically in line with our expectations, and we slightly adjusted our original profit forecast. It is estimated that in 2023-2025, the company's revenue will be 1.83, 20.5 billion yuan, and 2.34 billion yuan; net profit due to income will be 180, 210, 250 million yuan; and EPS will be 0.92, 1.06, and 1.28 yuan. Maintain the company's buying rating.
The main risks faced by ratings
The growth rate of prefabricated buildings declined, the recovery in downstream demand fell short of expectations, and the results of business expansion fell short of expectations.