Core ideas:
Hongya CNC disclosed its 23-and-a-half annual report. The company's first-half operating income was 1.332 billion yuan, up 26.75% from the same period last year; the net profit from home was 308 million yuan, up 24.26% from the same period last year; of which 23Q2's operating income was 743 million yuan, up 46.42% from the same period last year; and the net profit from home was 185 million yuan, an increase of 30.47% from 23Q2 to 179 million yuan from the same period last year, up 104.49% from the same period last year.
Orders soared and single-quarter results hit a record high. According to the company's semi-annual report, in the first half of 2023, small and medium-sized furniture enterprises have obvious iterative demand for cost-effective CNC equipment and intelligent production lines, and the company's performance in the first and second quarters reached a record high in the same period.
Continue to make efforts to optimize the structure of high-end products, and new products contribute to performance. In the first half of 2023, the company increased investment in research and development of new products, especially in the development and promotion of high value-added products. In the first half of the year, the revenue contributed by new wooden door equipment was 39.52 million yuan, an increase of 147% over the same period last year. The revenue of major products such as edge sealing machines, CNC drills and machining centers in the first half of the year was 574 million yuan / 246 million yuan / 205 million yuan respectively, an increase of 23.86% / 34.38% / 15.90% over the same period last year, and the gross profit margin increased by 1.09pct/ 8.61pct/5.0cpt respectively.
The cost control is better, the income scale effect is reflected, and the endogenous net interest rate is high. The total cost during the 23Q2 period of the company was 49.39 million yuan, which was basically the same as the same period last year, with the expense rate of 6.65%, down 3.17 pct from the same period last year; the superimposed gross profit margin increased by 3pct to 33.7%, and the company's 23Q2 deduction non-net interest rate increased by 6.83pct to 24.04% compared with the same period last year.
Profit forecast and investment advice: we expect Hongya CNC's 23-25-year net profit to be 6.02 / 7.43 / 905 million yuan respectively. With reference to comparable companies and taking into account the increments brought about by the company's capacity expansion, Hongya CNC is valued at 20 times its parent net profit in 2023, with a reasonable value of 28.37 yuan per share and a "buy" rating.
Risk hints: technology research and development is not as expected; fierce competition in the industry leads to a decline in gross profit margin; insufficient capacity release; and downstream economic recovery is not sustainable.