Revenue increased by 25.2%, and performance returned to the growth track. In the first half of 2023, the company realized operating income of 18.62 billion yuan, + 25.2% compared with the same period last year, and realized net profit of 427 million yuan, + 378.17% over the same period last year. In the same period last year, the company made a number of large impairment losses resulting in a low base. At present, the company's impairment losses have been fully calculated, and the potential risk of large impairment in the future is relatively low, and the company's performance is back on the growth track.
In the first half of 2023, the company's engineering general contract business achieved revenue of 15.05 billion yuan, + 36.5% compared with the same period last year, continuing to maintain high growth; the design and consulting business achieved revenue of 1.018 billion yuan,-19.3% of the same period last year.
With the increase of total package share, the gross profit margin of the project is expected to hit bottom and pick up. The overall gross profit margin of the company in the first half of 2023 was 7.67%, down 1.31 percentage points from the same period last year and 0.6 percentage points higher than the whole of last year, of which the gross profit margin of the engineering and technical services business was 6.11%, down 3.13 percentage points from the same period last year. Down 0.36 percentage points from the whole of last year. The construction part of the company's general contracting business is mainly subcontracted, and less investment in its own resources leads to a low gross profit margin, with a gross profit margin of 1.9% in 2022. The company continues to implement the platform strategy, the proportion of total project revenue continues to increase, 2023H1 project total contract revenue accounted for 80.9%, an increase of 6.7% over the same period last year. With the continuous release of high-tech engineering market space, the rapid growth of downstream demand, the intensification of competition in the upstream subcontracting link, and the improvement of the company's bargaining power, the total gross profit margin of the project is expected to hit bottom and pick up.
The semiconductor business operates steadily, and photovoltaic power generation is light and stable to contribute revenue. In the first half of 2023, the operating income of semiconductor business was 2.31 billion yuan, + 1.0% compared with the same period last year, and that of photovoltaic power generation business was 170 million yuan,-25.3% of the same period last year. The company's five subsidized photovoltaic plants in Inner Mongolia continue to operate at parity, and the decline in photovoltaic revenue is expected to continue to contribute income and cash flow in the future.
Investment advice: maintain profit forecasts and maintain "buy" ratings. As a leading enterprise in high-tech engineering design and general contracting, the company has strong competitiveness in electronic and high-end manufacturing, photovoltaic modules, biomedical engineering and other fields, with high design business barriers and strong profitability. it is expected to fully benefit from the expansion of high-tech engineering market demand; semiconductor and photovoltaic business steady operation is expected to continue to contribute revenue and profits. It is predicted that the return net profit of the company from 2023 to 2025 is 8.01 pound 1.363 billion yuan, the earnings per share is 0.38 pound 0.49 billion yuan, and the corresponding share price PE is 17.0 pound 13.0 pound 10.0X. Target price 8.08-9.12 yuan, maintain the "buy" rating.
Risk hints: the risk of macroeconomic change, the risk of policy change, the risk of market competition, the risk of subsidiary Haitai Semiconductor relying on a single customer, the risk of improving the bargaining power of equipment suppliers in the engineering general contract business, the risk of loss of core technical personnel, the risk of impairment of accounts receivable.