The return to home net profit grew steadily in the first half of the year, and the impairment affected the growth rate of H1 performance. The company disclosed that in 2023, the company's 23H1 realized operating income of 1.01 billion yuan, down 1.27% from the same period last year, and its net profit was 82 million yuan, an increase of 13.77% over the same period last year, deducting 74 million yuan from non-net profit, an increase of 10.33% over the same period last year. On a quarterly basis, Q1/Q2 revenue was 427 million yuan, an increase of 10.7 percent over the same period last year, and its net profit was 0.34 million yuan, an increase of 18.1 percent and 10.9 percent year-on-year. The asset impairment loss / credit impairment loss of the company's 23H1 is respectively 1.376max 4.23 million yuan, compared with the increase of 22H1 impairment expense, 22H1 is the impairment reversal. In terms of profitability, the company's 23H1 gross profit margin / net profit margin is 23.03% and 8.20% respectively, which increases 3.21/0.87pct respectively compared with the same period last year, and the profit level is improved.

The revenue of 23H1 mechanical and electrical engineering business has increased, and the gross profit margin of each business has increased. In terms of business, according to the company's 23-year mid-year report, the revenue of the company's 23H1 design consulting / mechanical and electrical engineering / engineering contracting / equipment manufacturing business was 2.23 billion yuan respectively, with a year-on-year growth rate of-1.1%, 32.8% and 42.2%, respectively, with a gross profit margin of 44.7% 13.7% 9.1% and 20.2% respectively. Year-on-year + 2.3/+4.3/+7.4/+4.0pct, the company's gross profit margin of each business has increased, the mechanical and electrical engineering business has achieved high growth, and the proportion of project contracting business has further declined. The company's 23H1 R & D expenses increased by 16.4% compared with the same period last year, and continued to increase R & D investment. relying on Cofco Group, the company has significant advantages in technology and products in the field of grain and oil engineering, smooth development of mechanical and electrical engineering business, and steady growth in revenue and market share.

Profit forecast and investment advice. It is estimated that the company's 23-25 net profit will be 2.84 million yuan per share, and the company's profit situation is expected to improve. According to the company's own growth rate and orders (compound growth rate of 40 percent over the next three years), as well as reference to the future market size, the company's fair value of 16.76 yuan per share remains unchanged, corresponding to the company's 23-year 30 times PE, maintaining a "buy" rating.

Risk hints: macroeconomic risks; the risk of declining profitability caused by intensified competition in the industry, and new business expansion falls short of expectations.