The company published its semi-annual report for 23 years. 23H1 achieved revenue of 9.209 million yuan/year on year +35.7%, net profit of 345 million yuan/year on year +7.1%, net profit of 259 million yuan/year on year +2.01% after deduction, weighted ROE 8.45% /year on year - 0.18 pct.
In terms of business structure: 23H1's share of emerging business increased by 2.2 pct compared to the end of last year, and the share of regional business increased by 4.3 pct compared to the end of last year. 23H1's outsourcing business revenue increased 43.9% year on year to 7.093 billion yuan, accounting for 77%, with a slight increase in gross margin; new customers in the outsourcing business increased 20% year on year, and the number of people served increased 7% year on year.
23H1 gross margin declined year over year, and the cost ratio continued to improve during the period. 23H1's overall gross profit margin was 10.38%/year on year -2.47 pct; sales/management/ R&D/ finance expense ratio was 3.94%/2.46%/0.29%/-0.69%, year on year, -1.30/-0.36/+0.01/+0.37 pct, respectively, and the period cost rate was 6.0% /year on year -1.27 pct. 23H1 net sales interest rate 4.29% /year-on-year -0.95pct.
Brand, customer, and channel advantages are obvious, and investment, mergers and acquisitions+digital transformation help improve development efficiency. Brand: Shanghai's clothing brand has strong influence. It is the main leader and participating unit in formulating standards for many domestic personal clothing industry standards, and has ranked first in the list of Chinese service agencies for three consecutive years. Customers: The company has accumulated high-quality and diverse customer resources, and the customer turnover rate and dependency on major customers are low. Channel: The company actively invests, mergers, and acquires to expand the global market, acquires 51% of Yuanmao shares, and actively expands in Hong Kong, Singapore and other places. At the same time, the company continues to increase human service technology innovation and digital transformation, and is expected to achieve continuous cost reduction and efficiency.
Profit forecasts and investment recommendations. The company's EPS is expected to be 0.31/0.36/0.41 yuan/share in 23-25, respectively. The company is a comprehensive service provider with a leading position in the domestic personal service industry. It has remarkable brand, customer and channel advantages, and further enhances influence at home and abroad through extended mergers and acquisitions, and accelerates the digitization process to reduce costs and increase efficiency. Referring to comparable companies, the company was given 22 times PE in 2023, with a reasonable value of 6.79 yuan/share, maintaining a “buy” rating.
Risk warning. Macroeconomics affects employment demand; increased competition; receivables recovery risks.