The company released its 2023 mid-year report. In the first half of the year, the company achieved revenue of 1,307 million yuan, an increase of 41.89%; net profit of 55 million yuan, an increase of 156.54%; net profit of non-attributable income of 22 million yuan, a decrease of 34.26%; and EPS of 0.15 yuan, an increase of 150.00%.
The company focuses on polymer core strategies and continues to push forward channel reform. Maintain the company's shareholding growth rating.
Key points to support ratings
23Q2's performance increased dramatically: 23Q2 achieved revenue of 800 million yuan, an increase of 34.22%, and net profit of 21 million yuan, an increase of 61.11%. In terms of cash flow, 23H1's net operating cash flow was -78 million yuan, and the net outflow scale was 76.39% narrower than the same period last year; 23Q2's net operating cash flow was -94 million yuan, and the net outflow scale was 20.23% narrower than the same period last year. The scale of the company's net operating cash outflow narrowed year-on-year in the first half of the year, mainly due to an increase in the company's accounts receivable recovery during the reporting period.
Profitability has increased, and management fee rates have declined markedly. 23H1's gross margin was 24.09%, an increase of 0.56 pct; its net profit margin was 4.22%, an increase of 1.88 pct. 23Q2 The company's gross margin was 24.98%, a decrease of 0.19 pct; the return net interest rate was 2.60%, an increase of 0.43 pct. In terms of period expenses, the company's expenses rate for the first half of the year was 19.16%, a decrease of 1.61 pct. Among them, the sales/management/R&D/financial expenses ratio changed 1.35/-5.12/0.23/1.93 pct, respectively, over the same period last year. The company's management fee rate dropped significantly in the first half of the year, mainly due to equity incentive share payments in the same period last year, but there was no such incident this year.
The cost pressure on asphalt is still there, and the gross margin of waterproof membrane has declined slightly. By product, in the first half of the year, the company's waterproof membrane accounted for 63.7% of revenue and waterproof coating revenue for 24.3%. Among them, the gross margin of waterproof membrane was 26.50%, a decrease of 1.55 pct; the gross profit margin of waterproof coating was 31.85%, an increase of 12.38 pct. The average price of petroleum asphalt in the first half of the year was 3,794 yuan/ton, down nearly 14% from the high level of around 4,400 yuan/ton in the first half of last year. However, asphalt prices in the first half of the year were still at a high level in the past five years, causing the company to still have some cost pressure.
Focus on polymer core strategies and continue to push forward channel reform. The company's production bases that have been put into operation and are under construction can cover most of the market areas in East China, North China, Central China, Southwest China, and Northwest China; the first phase of the polymer industrial park project designed by the company has entered the production stage and is expected to further enhance the company's leading position in the field of polymer waterproofing. Furthermore, the company continues to vigorously develop the dealer model, sink through channels, increase regional sales resources, and vigorously expand the broad market for industrial buildings, municipal buildings, and civil buildings.
valuations
The company's performance in the first half of the year was good, so we should adjust our profit forecast. The company's revenue for 2023-2025 is estimated to be 2.86 billion, 36.9 billion yuan, and 4.61 billion yuan; net profit to parent is 160, 240 million yuan, and 330 million yuan respectively; and EPS is 0.42, 0.63, and 0.85 yuan respectively. Maintain the company's shareholding growth rating.
The main risks faced by ratings
Prices of raw materials have risen sharply, demand expansion has fallen short of expectations, and the turnover of accounts receivable is difficult.