In the first half of 2023, revenue was +7.3%, Q2 deducted non-attributable net profit +133%. In the first half of 2023, the company achieved total operating income of 13.409 billion yuan, or +7.3%; net profit of 280 million yuan, +1716.7%; net profit after deducting non-attributable net profit of 71 million yuan, +0.1% year-on-year.
Among them, Q2 achieved operating income of 7.389 billion yuan, -4.4% year-on-year; net profit of 150 million yuan, +131189%; net profit of non-return net profit of 42 million yuan, +132.8% year-on-year. We expect the company's net profit to be 5.5/8.3/1.3 billion in 2023-2025, respectively, with a year-on-year growth rate of 47.0%/52.4%/55.9%, and corresponding PE 35/23/15 times, respectively. Comparable companies unanimously expect wind to have an average PE value of 27 times in 2023. Considering that the company is a leading manufacturer in the HAECO and offshore industries, its global competitiveness is outstanding. We gave the company 23 times 41 times PE, corresponding to a target price of 4.10 yuan (previous value of 4.50 yuan), and maintained the “increase in holdings” rating.
Profitability continues to increase, and expenses are well controlled during the period
In the first half of 2023, the company achieved a gross profit margin of 12.6%, +0.8 pp over the previous year. In the 2023 Q2 single quarter, the company's gross profit margin was 11.2%, +3.1 pp year on year, and profitability continued to increase. In terms of the cost rate for the period, the sales expense rate for the first half of the year was 0.8%, +0.1 pp, mainly due to the company's increased market development and marketing efforts; the management cost rate was 3.0%, the year on year - 0.3 pp; the financial expense rate was 1.3%, year on year - 0.1 pp; and the R&D expense rate was 3.3%, +0.1 pp, year on year, mainly due to the company's increase in expenditure on expensive R&D projects.
The cost rate for the total period was 8.5%, -0.1 pp from the previous year.
HAECO's new orders +15% year on year, further expanding its market footprint
The company has 6 production bases in Shanghai and Jiangsu, covering a total area of 10,000 mu and a total shoreline of 10 kilometers.
It has more than 20 60,000-tonne to 100,000-ton aircraft carriers. Currently, it is the only port machinery manufacturer in the industry that has the ability to independently transport complete equipment. The company's HAECO business grew strongly in the first half of the year. The amount of new contracts signed reached US$2.76 billion, an increase of 14.86% over the same period last year. The market footprint was further expanded. The company officially signed a contract with Guatemala for 4 intermodal vehicles, marking the product's entry into the 107th country and region. Domestic business development has been accelerated. It has won bids for major projects such as 14 platform bridges and 31 rail cranes at Luojing Wharf of the SIPG Group, and has further consolidated its main business chassis.
Port Machinery, the leader in the offshore industry, continues to benefit from the recovery of the industry, and maintains the “increase in holdings” rating as a leading global port machinery company. It also involves businesses such as Marine Heavy Industries, heavy duty special steel structures, and maritime transportation and installation. We expect the company's net profit to be 5.5/8.3/1.3 billion in 2023-2025, respectively, with a year-on-year growth rate of 47.0%/52.4%/55.9%, and corresponding PE 35/23/15 times, respectively. Comparable companies, Wind, unanimously expected an average PE value of 27 times in 2023. Considering that the company is a leading manufacturer in the HAECO and offshore industries, its global competitiveness is outstanding. We gave the company 23 times 41 times PE, corresponding to a target price of 4.10 yuan (previous value of 4.50 yuan), and maintained the “increase in holdings” rating.
Risk warning: Offshore business recovery is falling short of expectations, interest rate and exchange rate risks, raw material supply risks.