The company released its 2023 mid-year report. 23H1 achieved revenue of 6.54 billion yuan, same increase of 8.0%, net profit of 220 million yuan, same decrease of 25.3%, EPS of 0.19 yuan, same decrease of 26.9%; 23Q2 revenue of 3.35 billion yuan, same increase of 0.7%, net profit of 80 million yuan, same decrease of 36.5%. Considering the steady increase in the company's orders, the chemical fiber business was flexible during the year, and the company's holding growth rating was maintained.
Key points to support ratings
23Q2 revenue increased without profit increase, profit under pressure: 23H1 achieved revenue of 6.54 billion yuan, same increase of 8.0%, net profit attribution of 220 million yuan, same decrease of 25.3%, EPS of 0.19 yuan, same decrease of 26.9%; 23Q2's revenue was 3.35 billion yuan, same increase of 0.7%, net profit of 0.8 billion yuan, same decrease of 36.5%. In terms of cash flow, 23H1 net operating cash was -580 million yuan, and the outflow margin decreased year-on-year. 23Q2 net operating cash was -110 million yuan, and the outflow rate decreased month-on-month.
Orders for steel structures are rising steadily, and profit margins are under pressure. 23H1 signed a total of 7.52 billion yuan in new contracts, an increase of 5.4%, and 23Q2 signed new contracts of 4.08 billion yuan, an increase of 1.8%. A total of 65 unsigned orders have been won, totaling 5.44 billion yuan. 23H1 The gross profit margin of the steel structure business was 13.3%, a decrease of 1.4%. The gross profit margin of the EPC and subcontract business both declined year on year.
Demand for chemical fibers improved and became elastic during the year. 23Q2 The company's chemical fiber sales volume reached 119,000 tons, an increase of 18.4%, an increase of 3.8%, a tonne price of 6,734.4 yuan, an increase of 3.4%, and an increase of 220.2 yuan. The gross profit margin of the 23H1 chemical fiber business was 2.1%, a decrease of 2.3 pct. However, with the recovery of the downstream consumption scenario, the prosperity of the industry gradually increased, and there was some flexibility during the year.
The release of BIPV orders is expected to increase the company's profits. The company continues to explore BIPV application scenarios. As module prices drop and industrial and commercial users' enthusiasm for installation increases during the year, the distributed photovoltaic business is expected to usher in order release. 23H1 undertook a total of 84.778 million yuan for photovoltaic power plant EPC projects. As orders are converted, it is expected to increase the company's profits.
valuations
Affected by credit impairment due to accounts receivable, the company's performance fell short of expectations. Profit forecasts were partially lowered. It is estimated that the company's revenue for 2023-2025 will be 132.0, 147.0 billion yuan, and 16.22 billion yuan, respectively, and net profit attributable to the mother will be $5.0, 6.0, and 680 million yuan respectively; EPS will be 0.43, 0.51, and 0.58 yuan respectively, with a price-earnings ratio of 14.7, 12.3, and 10.8 times. Maintain the company's shareholding growth rating.
The main risks faced by ratings
Prices of raw materials have fluctuated greatly, EPC projects have fallen short of expectations, and the recovery in downstream demand has fallen short of expectations.