Event description
Sainz 2023H1 realized operating income of 268 million yuan, an increase of 28.0% over the same period last year, a net profit of 36 million yuan, an increase of 8.79% over the same period last year, and a non-performance of 33 million yuan, an increase of 21.7% over the same period last year. Of this total, Q2 achieved an operating income of 167 million yuan in a single quarter, an increase of 28.8% over the same period last year, with a net profit of 23 million yuan, down 7.97% from the same period last year. Non-profit was 22 million yuan, an increase of 1.3% over the same period last year.
Event comment
Driven by the policy, the prosperity of the heavy metal pollution control industry has improved, driving the company's revenue to increase by 28.0%. 1) the income of the comprehensive solution is 124 million yuan, + 114.7% compared with the same period last year, mainly due to the stricter discharge standards of heavy metal pollution and the opinions on further strengthening the prevention and control of heavy metal pollution (issued by the Ministry of Ecology and Environment in 2022). The prosperity of the industry has improved. 2) the revenue from operating services is 85.219 million yuan,-12.0% compared with the same period last year. 3) the product sales revenue reached 55.795 million yuan, + 18.3% compared with the same period last year, mainly due to the results of market development of complete sets of water treatment equipment; the company 2023H1 has obtained 10 orders for integrated heavy metal wastewater treatment equipment (including 2 sets exported to Africa), with a cumulative order of more than 30 million yuan, + 33% compared with the same period last year.
The increase of homing net profit is lower than that of revenue growth, mainly due to the increase in the rate of management expenses, the decrease of other income and the increase of credit impairment.
The company's gross profit margin was stable, 2023H1 increased 0.14pct to 33.3%, and the expense rate increased 0.51pct to 17.95%, of which the management expense rate increased to 7.38%, mainly due to the company's adjustment of salary structure, the opening of the epidemic, the increase in travel and other activities, and the amortization of share-based payment fees during the reporting period of the equity incentive plan. 2023H1 realized other income of 3.622 million yuan, compared with 6.111 million yuan in the same period last year; it included credit impairment loss of 4.455 million yuan, and credit impairment loss of 842000 yuan in the same period last year, which was a drag on the net profit of homecoming.
Cash flow improved. The net cash flow of 2023H1's operating activities was 27 million yuan, compared with-19 million yuan in the same period last year; the cash-to-cash ratio and net-to-cash ratio were 102.4% and 70.4% respectively, mainly due to the strengthening of the management of receivables.
The development process of internationalization has been accelerated. In 2022, the company and Zijin Mining Group Australia Norton Jintian Co., Ltd. signed a heavy metal pollution prevention and control solution contract of 1.539 million yuan to promote overseas layout; the Serbian subsidiary of 2023H1 has achieved a net profit of 2.295 million yuan. In addition, the company is preparing to set up Sainz (Hong Kong) Holdings Limited (proposed) and Sainz Environmental Technology (Perth) Co., Ltd. (proposed) to promote overseas related business development.
New technology, new model or contribution performance increment. 1) New technology: company prospectus R & D project layout waste acid treatment and metal material recovery in new energy industry, helping to realize the recycling of copper, lithium, cobalt, nickel and other metals. 2) New model: according to the prospectus, the company realizes the directional adsorption of rare and precious metals such as rhenium in waste acid wastewater through technical research and development, and recovers valuable resources such as sodium chloride, sodium sulfide, sodium sulfate, sulfuric acid, hydrochloric acid and hydrofluoric acid from waste acid, and may obtain valuable resource recovery income in the future.
Profit forecast and valuation: the company's equity incentive plan to fully mobilize the enthusiasm of employees. In 2023, the copper, lead and zinc industry began to implement special emission limits. Environmental inspectors, soil surveys and heavy metal incidents in Jiangxi are all conducive to the release of market space in the industry. The company is a leading enterprise in the treatment of heavy metal pollution and is expected to benefit. It is estimated that the company's net return profit from 2023 to 2025 will be RMB 0.92 million, compared with the same period last year, which is estimated to be RMB 1.45 billion, compared with the same period last year. The company is estimated to have a net profit of 0.92 million yuan, compared with the same period last year, which is estimated to be 1.92 million yuan in net profit from 2023 to 2025, compared with the same period last year, which is + 39.0%, 57.1%, 34.4%, and maintain the "buy" rating.
Risk hint
1, the risk of iterative technology upgrading; 2, the risk of sustainability of operational service projects.