Event: The company released its 2023 semi-annual report. 1) 2023H1 achieved operating income of 602 million yuan, up 28.89% year on year; net profit attributable to shareholders of listed companies was 50 million yuan, down 11.65% year on year; net profit after deducting net income of 34 million yuan, down 32.03% year on year. 2) 2023Q2 achieved operating income of 326 million yuan, up 18.18% year on year; net profit attributable to shareholders of listed companies was 29 million yuan, down 22.49% year on year; net profit after deducting net profit after deducting net income of 316 million yuan, down 49.91% year on year.
Industry focus has been implemented, and revenue has continued to grow steadily. The company achieved revenue of 602 million yuan in 2023H1, an increase of 28.89% over the previous year. General Automation is the company's main source of revenue, achieving sales revenue of 551 million yuan, an increase of 23.20% over the previous year. CNC machine tools achieved sales revenue of 44 million yuan, an increase of 521.3% over the previous year. The company actively develops key customers by implementing industry focus.
The company implemented organizational structure adjustments, set up multiple industry divisions, set up specialized marketing teams to deeply cultivate key industries, accumulate R&D experience and customer usage feedback data, continuously optimize the adaptability of servo products in focus industries, and form a competitive advantage. In addition, the company actively absorbs talents and strengthens the construction of sales channels. The stability and expansion of the dealer team, unobstructed sales channels and high-quality dealer resources have contributed to the company's overall business growth.
Gross margin has declined, and investment has strengthened technical reserves and customer development. The company's gross margin for 2023H1 was 29.76%, year on year -2.75 pct; net profit margin on return was 8.31%, year on year -3.81 pct; net profit margin after deducting non-return home was 5.71%, year on year -5.12 pct; cost ratio for the period was 23.03%, +1.54 pct year on year. The company's gross margin for 2023Q2 was 30.40%, +1.41 pct, year on year -2.26 pct; return net profit margin was 8.74%, year on year -4.59 pct; net profit margin after deducting non-return home net profit margin was 4.82%, year on year -6.58 pct. The company's overall profit indicators have declined. The company's key customers are mainly concentrated in the new energy industry. The sales price of similar products is lower in the new energy industry than in other industries. The gross margin of the company's products declined slightly year-on-year due to factors such as the large share of sales in the new energy industry and product upgrades. Furthermore, the company is in a period of rapid development. In order to better seize market opportunities, improve technological innovation capabilities and R&D levels, it has increased investment in the market and R&D, and sales and R&D expenses have increased, leading to a year-on-year decline in net profit.
Profit forecast and investment suggestions: We expect the company's operating income from 2023-2025 to be 1,271/16.53/2,078 billion yuan, +34.63%/30.03%/25.72%; net profit from the same period is 122/1.58/210 million yuan, +34.56%/30.22%/32.34%; EPS is 0.81/1.05/1.39 yuan, corresponding PE is 47/36/28 times, respectively. Maintain a “buy” rating.
Risk warning: risk of new product and technology development; risk of macroeconomic fluctuations; risk of fluctuations in raw material prices