Event: the company disclosed that the 2023H1 reported that the single Q2 homing net profit increased by 86.01%. In the mid-2023 report, 2023H1 achieved revenue of 771 million yuan, an increase of 48.56% over the same period last year, and a net profit of 91 million yuan, an increase of 55.93% over the same period last year. In the split quarter, 2023Q2 achieved revenue of 383 million, an increase of 53.41% over the same period last year, and a net profit of 45 million yuan, an increase of 86.01% over the same period last year.
Take the initiative to adjust orders and business composition, and optimize capacity distribution in an all-round way
In terms of revenue composition, the core business of H1 company in 2023 is natural gas chemical equipment, petroleum refining equipment and new energy high-end equipment business, with a combined income of 683 million yuan, accounting for 91.51% of revenue. Of this total, the revenue of petroleum refining and chemical equipment was 236 million yuan, an increase of 281.22%, a gross profit margin of 17.91%, a year-on-year change of + 6.42pcts, a revenue of 247 million yuan of natural gas chemical equipment, a year-on-year increase of 22.93%, a gross profit margin of 25.96%, a year-on-year change of-4.87pcts, and a new energy high-end equipment revenue of 200 million yuan, an increase of 11.64%, a gross profit margin of 23.22%, a year-on-year change-0.32pcts. The revenue growth rates of the three businesses are quite different, mainly due to the company's active adjustment of orders and business purchases in 2022 and 2023, and the gradual tilt of new orders to oil refining and natural gas chemical equipment. The gross profit margin of natural gas chemical equipment decreased compared with the same period last year, mainly due to the fact that the company used more valuable raw materials in its products to meet the high-end needs of customers, and transferred part of the gross profit margin to achieve a larger gross margin growth.
Stable delivery of key customer products and abundant on-hand orders highlight revenue potential in 2023, H1 continued its business strategy of specializing in high-quality large customers. Wanhua Chemical, China Chengda, Hualu Engineering Technology, Huizhou Yuxin, Yulong Petrochemical and other project products have been made, and the cooperation with high-quality customers has been further deepened, which has laid a solid foundation for the stable growth of the company's performance. In 2023, H1 Company actively broke through the difficulties of product research and development, participated in the manufacture of key equipment of the low-medium coal preparation "concentration urea-based compound fertilizer" project, and delivered the first large-scale coal gasification core equipment gasifier, which formed technical accumulation in the clean and efficient utilization of coal chemical industry. According to the disclosure of the company, by 2023, the amount of orders held by Kexin Mechanical and Electrical Co., Ltd. is about 2.1 billion yuan, and the contract debt is about 590 million yuan. The abundant orders-on-hand and contract liabilities directly show the company's high revenue growth potential.
The fixed increase project has been initially promoted, and the capacity bottleneck has been gradually broken through.
In 2023, H1 Company completed the fixed increase, raising a total of 581 million yuan, which will be mainly used in high-end process equipment intelligent manufacturing projects, digital upgrading and cleaning transformation projects, as well as the construction of hydrogen energy and specialty R & D centers. By the end of June 2023, the intelligent manufacturing project for high-end process equipment has started construction, with a construction progress of 9.96%, and production is expected to reach production in August 2024. The completion and commissioning of the project will enable the company to break through the capacity bottleneck, not only directly enhance the company's ability to obtain orders, but also carry out R & D and production of larger equipment.
Investment advice:
As a rare company with high technical level and strong production capacity in the pressure vessel industry, the company has abundant orders on hand, the production capacity is expected to be further improved, and the leading effect of the company's industry may be gradually highlighted. In the future, it is expected to continue to benefit from the rapid construction of downstream projects to achieve a steady increase in market share. We predict that the company's net profit from 2023 to 2025 will be 1.8,2.5 and 320 million yuan, respectively, an increase of 50.7%, 32.7% and 32.4% over the same period last year, corresponding to a six-month target price of 19.3X, 14.3X and 11.3X for PE, which is equivalent to 27 times the dynamic price-earnings ratio in 2023.
Give a "buy-A" rating.
Risk hint: the progress of equipment installation is not as expected; the expansion of new business and new sections is not as expected; the demand for pressure vessels in the petrochemical and natural gas industry is declining.