The company achieved a net profit of 203 million yuan in the first half of 2023, + 43.41% compared with the same period last year. The company's wind power blade production and sales grew faster than expected in the first half of the year, and the large-leaf product layout and production capacity improvement will push the company's blade plate into the volume-profit stage. Due to multiple factors affecting the overall construction pace of wind power installation in the second quarter, the overall construction pace of wind power installation is slightly delayed, and we believe that the tender quantity that has not been landed in the first half of the year and the delayed order volume are expected to enter the centralized delivery period in the second half of the year, and the company is expected to fully benefit from the large leaf iterative background. accelerate the realization of performance and increase market share.
We maintain the company's annual homing net profit forecast of $557 million in 2023-24-25, corresponding to the EPS forecast of $0.69 million and $0.93 billion. With reference to the valuation level of the comparable company, we give the company 2023 22xPE, corresponding to the target price of $15, and maintain the "buy" rating.
2023H1's homing net profit is + 43.41% compared with the same period last year, and the performance is in line with expectations. In the first half of 2023, the company realized operating income of 8.219 billion yuan, + 15.21% year-on-year; net profit of 203 million yuan, + 43.41%; and non-return net profit of 172 million yuan, + 122.52% of the same period last year. Among them, the company's 2023Q2 achieved revenue of 4.205 billion yuan in a single quarter, + 26.15% year-on-year; net profit of 94 million yuan, + 46.95%; and non-return net profit of 87 million yuan, + 185.86%. In terms of profitability, the overall gross profit margin of the company in the first half of 2023 was 15.29%, an increase of 4.17pcts over the same period last year; and the net profit margin was 2.06%, an increase of 0.26pcts over the same period last year. Among them, 2023Q2 single-quarter gross profit is 16.21%, year-on-year / month-on-month increase of 6.66pcts1.88pcts; net profit of 2.00%, year-on-year increase of 0.64pcts, month-on-month decline of 0.13pcts.
The company actively promotes the research and development of large-leaf products and the layout of production capacity, while further expanding overseas business, production and operation continues to improve steadily, and the profit end maintains rapid growth.
With the rapid growth of leaf production and sales, the large leaf layout and the downward price of raw materials contributed to the rise of blade volume. In the first half of 2023, the company's wind power blade production and sales exceeded expectations, with output reaching 7.79GW, + 103.39% year-on-year; operating income 2.819 billion yuan, + 13.99% year-on-year; and unit power price 3619,000 yuan / MW, down 44% from the same period last year. 2023Q2 single-quarter wind power blade output 4.50GW, month-on-month + 36.78%; realized operating income 1.421 billion yuan, month-on-month + 1.64%; price 31.58 million yuan / MW, down 25.69%.
In the first half of the year, the prices of epoxy resin and glass fiber, the core raw materials of wind turbine blades, fell sharply, the dilution of large-scale wind turbines to the unit value of large blades, and the decline of blade unit power prices, but the profitability dimension increased significantly. The company's large-leaf capacity has been shipped in bulk, and has the mass production capacity of super-large blades, the optimization of product structure and capacity improvement will push the company's blade plate into the volume-profit rising stage.
Wind power installation is expected to increase in the second half of the year, and the company's performance is expected to accelerate under the background of large-leaf iteration. Due to multiple factors, the overall construction pace of wind power installation was slightly delayed in the second quarter of 2023, but the delivery of spare parts orders in July and August has obviously improved compared with the previous month. We believe that the unlanded bidding volume and delayed delivery orders in the first half of the year are expected to enter a centralized delivery period in the second half of the year, and wind power installation is expected to usher in the release of wind power. In line with the development trend of the industry, the trend of large-scale fan may continue to deduce, the diameter of impeller continues to grow, and the demand for large-leaf blades is exuberant.
The company has completed the mold replacement of the large leaf type, realizing the delivery capacity of the large leaf type products, and the independently developed "Haifeng 1" 110 m super large wind power blade has successfully passed the installation test, and successfully dropped the offshore blade of the longest blade type 111.5m offshore wind turbine blade. In the context of large-leaf iteration, the company is expected to fully benefit, speed up the realization of performance and increase market share.
The business of rail transportation and industrial engineering has developed steadily, and the automotive sector has achieved remarkable results in reducing costs and losses. In the first half of 2023, the operating income of rail transit parts of the company was 931 million yuan, which was basically the same as that of the same period last year, while that of industrial and engineering parts was 932 million yuan, + 12.42% of the same period last year. On the basis of tamping the domestic core market, the rail transit division of the company continues to strengthen the development of overseas markets. Both newly signed overseas orders and domestic market sales orders have increased by more than 40%, and the overall market share has continued to increase. The company's Industrial and Engineering Division focuses on market development and technological innovation, and has achieved major breakthroughs in new customer development and technical difficulties. The operating income of the auto parts sector reached 3.305 billion yuan in the first half of 2023, a year-on-year increase of 25.09%. In the face of the unfavorable factors of rising raw material prices and the pressure of fierce competition in the industry, the subsidiary New Materials Germany focuses on promoting regional restructuring in Germany, reducing operating costs and improving profitability, while strengthening capacity construction and market development efforts in the Asia-Pacific region, and achieved remarkable results in reducing costs and losses in the first half of the year.
Risk factors: large fluctuations in raw material prices; lower-than-expected wind power installation; risk of wind power policy adjustment; automobile sector affected by local epidemic and Russian-Ukrainian conflict continues to be depressed.
Earnings forecast, valuation and rating: the company's wind power blade production and sales grew faster than expected in the first half of the year, and the large-leaf product layout and capacity improvement will push the company's blade plate into the volume-profit stage. Due to multiple factors affecting the overall construction pace of wind power installation in the second quarter, the overall construction pace of wind power installation is slightly delayed, and we believe that the tender quantity that has not been landed in the first half of the year and the delayed order volume are expected to enter the centralized delivery period in the second half of the year, and the company is expected to fully benefit from the large leaf iterative background. accelerate the realization of performance and increase market share. We maintain the company's annual net profit forecast of return to home in 2023-24-25 at RMB 745,927 million, corresponding to the EPS forecast of RMB 0.69max, 0.93pm, 1.15 yuan, with reference to the valuation level of comparable companies (select Sinopec, Zhenan Technology and Top Group, which have similar businesses in the wind turbine blade, rail transit and automotive industry as comparable companies, based on the current average PE of 22x in 2023 based on the consensus forecast of Wind) Give the company a 2023 22xPE, corresponding to the target price of 15 yuan, and maintain a "buy" rating.