Event: the company recently released its semi-annual report of 2023, with operating income of 6.13 billion yuan in the first half of the year, + 8.2% year-on-year, and net profit of 370 million yuan, + 14.9% compared with the same period last year. In the second quarter alone, the company achieved an operating income of 3.46 billion yuan (+ 21.6%) and a net profit of 220 million yuan (+ 18.2%).
In the first half of the year, the recovery of sanitation equipment market was less than expected, and the penetration rate of new energy increased compared with the same period last year. 1H23 national sanitation equipment market added 40063 vehicles,-9% year-on-year, a decline of-20% compared with the whole of 22 years, but the degree of recovery is still less than expected. Among them, the new energy sanitation equipment market maintained a high growth rate, with 2466 new vehicles insured, + 13% new insurance volume on the basis of last year's high base, and the new energy penetration rate reached 6.2%, compared with the same period last year + 1.3pct.
The company's sales volume of new energy sanitation equipment has increased significantly, and its market share has further increased. 1H23's total sales of sanitation equipment is 6008,-15% compared with the same period last year; the company's market share of full-caliber equipment remains stable. Among them, 885 new energy sanitation equipment were sold, + 46.5% last year, and the market share of new energy sanitation equipment further rose to 36.6%, ranking first in the new energy market. With the implementation of the new policy of electrification of vehicles in the public domain, the company's new energy sanitation equipment business is expected to maintain a high growth rate in 23-25 years.
There are 254 sanitation services in hand, with an annual service amount of 6.283 billion yuan. 1H23 Company has signed 42 new sanitation service projects, with an additional annual contract value of 1.007 billion yuan, leading the industry. The company operates 254projects in hand, the annual service amount reaches 6.283 billion yuan, and the sustainable management ability is continuously enhanced. In the first half of the year, the company's sanitation services sector achieved revenue of 2.594 billion yuan, + 36.38% compared with the same period last year, and the gross profit margin of sanitation services reached 21.74%, year-on-year + 3.42pct.
Due to the less-than-expected recovery in the sanitation equipment market, we lowered the company's sanitation equipment sales forecast for 23-25 years. It is estimated that the return net profit of the company in 23-25 is 8.23 billion yuan (the original forecast is 1.357 billion yuan). The corresponding earnings per share is 0.26 pound 0.32 pound 0.40 yuan (the original 24-year forecast value of 23 cylinder is 0.29 pound 0.33 pound 0.43 yuan).
Based on the historical valuation of the company over the past five years, the company is valued at 22 times PE in 2023, corresponding to the target price of 5.72 yuan and maintaining a "buy" rating.
Risk hint
The growth in demand for sanitation equipment is not as expected; the increase in new energy penetration is not as expected; the recovery of accounts receivable is not as expected.