Incident: The company issued a semi-annual announcement. 23H1 achieved operating income of 2.146 billion yuan, an increase of 79.61% over the previous year; realized a return profit of 185 million yuan, an increase of 95.91% over the previous year; realized net profit of 153 million yuan deducted from non-return home, an increase of 105.59% over the previous year.
The company's semi-annual performance was in line with expectations.
Comment:
The power battery business grew rapidly, driving the company's revenue growth in the first half of the year. In the first half of '23, the company's revenue was 2.146 billion yuan, yoy 79.61%, of which: 1) Lithium battery business: achieved revenue of 1,804 billion yuan, up 109.98% year on year, mainly due to the rapid growth of the power battery industry in recent years, driving an increase in demand for equipment, and a continuous increase in the company's power battery equipment revenue; 2) Consumer electronics business: achieved revenue of 176 million yuan, up 4.34% year on year; 3) GM laser business: achieved revenue of 83 million yuan, up -6.74% year on year.
The gross margin remained at a high level, and the net interest rate increased due to a decrease in the expense ratio. 23H1's gross sales margin was 30.48%. The gross margin level for the same period last year was 33.99%, and the gross margin remained at a high level. 23H1's net sales interest rate was 8.56%, and the net interest rate level for the same period last year was 7.53%. The increase in the company's net interest rate was mainly due to the decline in the company's expenses rate during the period under fine management+scale effects. The cost rate for 23H1 for the comprehensive period was 20.90%, and the cost rate level for the same period last year was 25.72%.
With multiple business layouts such as lithium battery/photovoltaic/3C, the company has plenty of orders on hand. The company gives full play to the technical advantages accumulated over many years in the power battery, energy storage, photovoltaics, 3C and other industries, responds positively to customer needs, and provides customers with satisfactory comprehensive laser and automation solutions in a timely manner. The company's photovoltaic business has received orders from many customers including Jingke Energy, Tianhe Solar, and Tongwei Co., Ltd. As of the disclosure date of the semi-annual report in '23, the company's TopCon laser has signed a contract for 350GW+ for primary doping equipment. The company has sufficient orders on hand. From January to June 2023, the company signed new orders of about 2.7 billion yuan (tax included). As of June 30, 2023, the cumulative amount of orders on hand was about 8.5 billion yuan (tax included).
The 23-24 profit forecast was lowered, and the 25-year profit forecast was added to maintain the buying rating. Considering that the growth rate of downstream customer production expansion is slowing down, or the growth rate of orders in the power battery industry is slowing down or falling, the demand growth rate for new equipment has declined. Therefore, the 23-24 profit forecast was lowered and the 25-year profit forecast was added. It is estimated that the company's net profit for 23-25 will be 657, 9.43, and 1,157 billion yuan respectively (previously predicted 23-24 performance was 727 and 1,016 million yuan, respectively), and corresponding PE was 13.9, 8X, respectively. Considering that the company is deeply involved in the laser and automation industry, has achieved rapid growth in the power battery business, and achieved breakthroughs in the photovoltaic industry and new display industries, the company's future growth space may continue to open up. Therefore, maintain the buy rating.
Risk warning: the risk that downstream enterprises will not expand production as expected; the risk of increased competition in the industry; the risk that expansion into new fields such as photovoltaics falls short of expectations, etc.