The company released the 2023 semi-annual report. In the first half of 2023, the company achieved operating income of 3.344 billion yuan, +8.53% year on year, and net profit of 158 million yuan, +34.13% year on year. Among them, the company achieved revenue of 1,807 million yuan in a single Q2, +10.15%/+17.64% year-over-year, month-over-year net profit of 105 million yuan, and +72.80%/+120.00% year-over-year. The company has maintained a revenue growth trend since 2020.

The style of play on the intensive farming circuit is divided, and the overseas growth rate is impressive. The company's main business, cans, and printing processing revenue totaled 3.150 billion yuan, accounting for 94.47%, up 4.84% year on year. Among them, overseas performance increased significantly, achieving revenue of 361 million yuan, a year-on-year increase of 45.79%, revenue accounting for 10.81%, +3.06pct, further expanding the brand's overseas market share. In terms of production capacity, the marginal production capacity of the two-piece can has helped achieve a high increase in overseas business. The technical improvement projects at the Zhangzhou and Shenyang plants formed production capacity and at the same time, the Ya'an plant began trial production. The main source of profit is the Cambodia Phase III project, which is expected to be put into operation in 23Q4. In terms of cost reduction and efficiency, the three-piece can achieved a double increase in revenue and profit, thanks to the three-piece can's cost reduction and efficiency strategy, which has achieved remarkable results. The company's net interest rate in the first half of 2023 was 4.56%, +1.1 pct compared to the same period last year, and the management expense rate/sales expense rate/financial expense ratio were respectively -0.31 pct/-0.03 pct/-0.09 pct for the same period last year. In terms of research and development, in the first half of 2023, the company's R&D expenses stepped up efforts to develop new products and new can types. The aluminum bottle business was more compatible with upgrading the downstream beer consumption structure, and received good feedback from the market.

Continuously strengthen investment in technology research and development, and stabilize and improve the level of value-added services. In the first half of 2023, the company obtained 1 invention patent and 5 utility model patents, and submitted 4 invention and patent applications to enrich the company's intellectual property content and further enhance its differentiated competitiveness. Technological improvements further meet customers' value-added service needs. In the first half of 2023, the company's filling business increased by 30% year-on-year. In the second half of 2023, it is optimistic that the total volume will continue to expand with related customers, contributing more revenue.

Maintain a “Highly Recommended” investment rating. The company is a leading domestic metal packaging brand, and the industry's traditional peak season performance can be expected to improve in the second half of the year. We expect the company to achieve net profit of 324 million yuan, 397 million yuan and 497 million yuan respectively in 2023-2025, up 55%, 23%, and 25% year-on-year respectively. The current stock price corresponds to 23-year PE of 14.9x, maintaining the “highly recommended” investment rating.

Risk warning: Raw material prices fluctuate, Red Bull competition intensifies, and market competition intensifies.