Events:
According to the recent semi-annual report of 2023, the company achieved 2.282 billion yuan in operating income in the first half of 2023,-2.43% in the same period last year, 230 million yuan in net profit, + 82.72% in the same period last year, 1.37 billion yuan in operating income in 2023Q2 alone, about-1.93% in the same period last year, and 142 million yuan in net profit in the first half of 2023, + 59.55% in the same period last year.
Short-term income is under pressure and gross profit margin has rebounded. Real estate as an important downstream of elevator products, although the total demand of the industry is declining, the supporting demand of the core cities is not reduced, and many factors such as improvement demand, rail transit, transformation of old residential areas and other factors strongly support the future development of the elevator industry. 2023H1's comprehensive gross profit margin is about 28.66%, year-on-year + 5.73pct, mainly due to the decline in the price of raw material steel. In the first half of the year, the company's expense rate is about 17.66%, of which the sales / management / R & D / financial expense rate is 9.93%, 3.66%, 4.18%, 0.11%, respectively. The overall control is good, and the company continues to implement fine management to promote cost reduction and efficiency. 2023H1 achieved a net cash flow of about 357 million yuan from operating activities, and the cash flow situation was greatly improved.
There are plenty of orders on hand, and the elevator business is growing rapidly. Up to now, the valid order executed by the company is about 8.082 billion yuan, and the order amount of rail transit escalator project is about 2.2 billion yuan, which provides a strong support for the company's future performance. From a sub-sector point of view, the revenue of 2023H1 elevator business is + 44.89% compared with the same period last year, mainly due to the active promotion of the real estate "guaranteed delivery building" policy. From January to June 2023, the housing completed area was + 19% compared with the same period last year, of which the residential completed area was + 18.5%, which effectively promoted the business development of vertical ladders. The revenue of escalator business is-72.46% compared with the same period last year, which is mainly due to the volatility of rail transit orders, but at present the company is full of orders to ensure the steady growth of escalators in the future. Installation and maintenance plate revenue + 14.98% compared with the same period last year, mainly due to the continuous increase in the number of elevators held by the company.
Actively open up overseas markets, post-market business is worth looking forward to. The company continues to expand the layout of overseas markets, with revenue of 155 million yuan in overseas business in the first half of the year, about + 32% over the same period last year, mainly because the company accelerates channel layout and firmly seizes the development opportunity of "Belt and Road Initiative". At the same time, the market after the elevator has a broad business space, the transformation of old ladders and regular maintenance business are expected to further enhance the value of products.
Investment advice and rating: the company's 2023-2025 net profit is expected to be 391 million, 455 million and 535 million, respectively, corresponding to PE of 18x, 15x, 13x, the first time to cover the "overweight" rating.
Risk hint: order delivery is not as expected; profit forecast and valuation model failure risk