Event: the company released its semi-annual report for 2023, with an operating income of 6.133 billion yuan, an increase of 8.18% over the same period last year, and a net profit of 373 million yuan, an increase of 14.85% over the same period last year. In the second quarter of 2023, the company achieved operating income of 3.461 billion yuan, an increase of 21.62% over the same period last year, and a net profit of 217 million yuan, an increase of 18.20% over the same period last year.
Smart services business is growing rapidly, and the smart equipment sector continues to be under pressure.
2023H1's urban service business realized operating income of 2.594 billion yuan, an increase of 36.38% over the same period last year, with a total new contract value of 5.812 billion and an annual contract value of 1.007 billion, ranking first in the same industry market. By the end of June 2023, the annual contract value of the company's stock market reached 6.283 billion, the cumulative total contract amount reached 59.077 billion, and the total contract amount to be executed reached 45.41 billion.
The operating income of 2023H1's intelligent equipment business reached 2.566 billion yuan, down 9.22% from the same period last year. In the first half of 2023, the company ranked first in terms of sales volume of sanitation equipment in the same industry, and ranked first in the domestic industry for 22 consecutive years. From January to June 2023, the company sold a total of 6008 vehicles of sanitation equipment, of which 885 were sold of new energy products, an increase of 46.5 percent over the same period last year, accounting for 36.6 percent of the market share, ranking first.
In terms of gross profit margin, the gross profit margin of 2023H1 smart services increased by 3.42 pct year-on-year to 21.74%, and that of smart equipment increased by 0.96 pct year-on-year to 26.84%. In the first half of 2023, the company's overall gross profit margin was 25.33%, an increase of 1.87 pct over the same period last year.
Continue to focus on intelligent sanitation and diversify business forms.
In terms of intelligent equipment, the company has built a relatively perfect domestic product line of environmental protection equipment, providing customers with a variety of complete equipment solutions, such as sanitation and cleaning equipment, garbage collection and transfer equipment, new energy and clean energy environmental protection equipment, with more than 400 product models.
In terms of urban services, big data Yun Wisdom Sanitation platform, the leading domestic sanitation industry chain, independently developed by the company, provides intelligent services to customers with more than 70,000 products nationwide, and the number of daily active users exceeds 30,000.
Maintain the "buy" rating: Yingfeng Environment is a sanitation service investment and operator with "smart sanitation" as the core, and its profits are under pressure due to the impact of the macro environment. We expect the company to achieve a net profit of RMB 9.01 billion in 23-25 (down 29% / 27% / 24%). The current share price is 23-25 PE times as much as 21-18-15. The company's market position is solid, the smart services business is growing rapidly, and the new energy business is expected to bring incremental performance and maintain a "buy" rating.
Risk tips: risks such as project construction and industrial policies are not as expected, local payment capacity is limited, and business development is not as expected due to fierce market competition.