Q2 gross profit margin has improved, new energy vehicle air filtration business has steadily expanded, keeping the "buy" rating unchanged 2023H1 achieved revenue of 410 million yuan (+ 6.7%), home net profit of 40 million yuan (- 12.3%), the main 2023H1 received government subsidies of 4.51 million, a year-on-year decrease of 7.02 million compared with 2022H1, deducting non-net profit of 40 million yuan (+ 0.1%).
2023Q2's revenue is 200 million yuan (+ 11.5%), the net profit is 20 million yuan (- 12.9%), and the non-net profit is 20 million yuan (+ 20.0%). Considering the fierce price competition of domestic air conditioning filter, we downgrade our profit forecast for 2023-2025. It is estimated that the net profit of the company from 2023 to 2025 will be 0.8 billion yuan (1.3 billion yuan for 2023-2025), corresponding to 0.3 pound for EPS, and 20.7 times for current stock price corresponding to PE. New energy vehicle air filtration business will expand steadily. Keep the "buy" rating unchanged.
The basic export of home appliances continues to recover, and a number of new customers in air filtration of new energy vehicles have cooperated in mass production, according to the data of the China Chamber of Commerce for the Import and Export of Mechanical and Electrical products, from January to May 2023, China's air-conditioning exports to Japan increased by 14% compared with the same period last year. The recovery of export led to the steady growth of the basic plate of air-conditioning parts. The company accelerated the expansion of a new track for floor washer parts, and 2023H1 Tim's sales grew by more than 40%. In the field of new energy vehicles, the company has reached cooperation with some head customers. 2023H1 has not only achieved a stable supply to an international head new energy vehicle company, but also has mass production with a domestic head new energy vehicle company, and the production capacity is continuing to climb; in the afterloading market, the company has reached a deep cooperation with a domestic one-stop maintenance platform, 2023H1 has completed nearly 100 product proofing, and part of SKU has achieved mass production. The company continues to develop new products through research and development. As of June 30, 2023, the company has participated in the formulation and revision of 8 national standards, 13 industry standards and 57 group standards.
2023H1, the company's antiviral products have been mass-produced customers including Mitsubishi Electric, Hitachi, Fujitsu and so on.
Optimization of business structure, increase in gross profit margin led to an increase in non-net profit margin 2023Q2 gross profit margin 25.1% (+ 2.3pcts), the main overseas business growth, 2023Q2 company during the expense rate of 13.1% (+ 1.0pcts), of which the sales / management / R & D / financial expense rate was 4.1%, 7.1%, 2.5%, 0.5%, respectively. Year-on-year respectively-0.1/-1.4/+0.8/+1.7pcts. Affected by the devaluation of the RMB, the exchange gain of 2023H1 was 3.75 million, a decrease of 5.79 million from the same period of last year's 2022H1. Q2 net interest rate is 10.4% (- 2.9pcts), deducting non-net interest rate 9.6% (+ 0.7pct). It is optimistic that the air filtration business of new energy vehicles will lead to a steady improvement in profitability.
Risk tips: industry cycle changes; market competition intensifies; new energy vehicle new business development is not as expected.