Event: The company released its semi-annual report for 2023. In the first half of 2023, the company achieved revenue of 290.75 billion yuan, an increase of 3.93% over the previous year. Among them, Q1 achieved revenue of 128.095 billion yuan, an increase of 7.96% over the previous year; Q2 achieved revenue of 161.98 billion yuan, an increase of 0.96% over the previous year. In the first half of 2023, the company achieved net profit of 1,888 million yuan, a year-on-year decrease of 7.43%. Among them, Q1 and Q2 achieved net profit of 968 million yuan and 910 million yuan respectively, a year-on-year decrease of 6.36% and 7.24%, respectively.
Comment:
The “one, two wings” development strategy drives the company's business growth. By business, in the first half of the year, supply chain integration services, financial services, and high-end manufacturing contributed revenue of 273,028 billion yuan, 6.579 billion yuan, and 10.468 billion yuan respectively, accounting for 94.12%, 2.27%, and 3.61% of revenue, respectively, up 3.1%, 31.67%, and 12.94% from the previous year. The company focuses on a “stable integration, strong two wings” development strategy, creates smart supply chain integrated services, enhances financial support for the main smart supply chain integrated service business, and successively lays out high-end manufacturing industries such as wire and cable, tire manufacturing, cogeneration, pharmaceuticals and pharmaceuticals according to its own resource endowments and transformation and upgrading direction.
Industry prices were under pressure for a short time, and enterprises seized policy opportunities to expand the market. In the first half of 2023, prices of domestic steel products first rose and then fell. Strong economic recovery expectations in the first quarter led to stronger steel prices. In the second quarter, the steel market entered a demand verification period, demand for raw materials weakened, and prices plummeted. The coal market is affected by multiple factors, and the price of coal fluctuates and shows a downward trend. Meanwhile, in the first half of the year, the domestic petrochemical industry experienced new difficulties, such as a simultaneous decline in raw material and product prices and weak demand. As a result of industry pressure, corporate net profit declined 7.43% year-on-year in the first half of the year. In response, the state introduced relevant policies to support the safe and stable development of the supply chain, while promoting the steady expansion of the scale of foreign trade and structural optimization, providing enterprises with good prospects for development. In the first half of the year, the company's total import and export volume reached 8.901 billion yuan, an increase of 6.13% over the previous year.
Increase the ecological layout of the smart industry chain and stimulate the vitality of high-quality development. Using systematic thinking, the company continues to strengthen the upstream and downstream of the industrial chain and the layout of strategic emerging industries, creating an industrial ecosystem where “five modernizations” link and “four streams”, forming an industrial ecosystem where mutual interests coexist and win. In terms of high-end manufacturing, we continue to strengthen innovative research and development and new track layouts; in terms of financial services, we continue to specialize and excel. The company continues to strengthen R&D investment. In the first half of 2023, R&D investment was 399 million yuan, an increase of 27.08% over the previous year.
Continue to build a “logistics smart brain” and fully implement the construction of smart logistics warehouses, self-service terminals, mobile terminals, etc. Currently, IoT technology has covered more than 55% of warehouses, and technology applications such as the Internet of Things, digital twins, artificial intelligence, and cloud computing are becoming more mature, which strongly supports the high-quality development of enterprises.
Profit Forecast: First coverage gives an “increase in holdings” rating. It is estimated that in 2023-2025, the company will achieve operating income of 6,044.73/662.79/739,136 billion yuan, net return profit of 40.92/4946/6129 billion yuan respectively, and corresponding PE of 5.99x/4.96x/4.00x, respectively.
Risk warning: Domestic macroeconomic risks falling short of expectations, supply chain integration service risks, financial service risks, high-end manufacturing risks, profit forecasts and valuation models falling short of expectations