The net profit of deducting non-return increased by nearly 22% over the same period last year, and the strengthening of rebates led to the improvement of operating cash flow. The company released the mid-2023 report: 23H1 achieved revenue of 268 million yuan (year-on-year + 28.00%) and deducted non-return net profit of 33 million yuan (year-on-year + 21.67%). The market demand for heavy metal pollution control has increased, the sales of complete sets of water treatment equipment has made a breakthrough, and the company's performance has increased steadily. 23H1 gross profit margin reached 33.35% (year-on-year + 0.14pct), deducting non-return net profit rate of 12.22%, remained stable. In addition, the company strengthened its repayment efforts, and the net operating cash flow of 23H1 reached 27.43 million yuan.
The second shareholder help + downstream expansion, the high growth trend remains unchanged. According to the China report: 23H1 heavy metal pollutant prevention and control comprehensive solution / product sales / operation services realized revenue of 1.24 trillion yuan, of which the solution revenue was + 33% compared with the same period last year. (1) the assistance of two shareholders: in 23 years, the company is expected to have related sales income of 350 million yuan with the second shareholders and their related parties; 23H1 has related sales revenue of 72.46 million yuan (+ 32.79% compared with the same period last year, accounting for 27% of the company's total revenue), of which solution / pharmaceutical sales accounted for 52% of 46%. (2) continuous expansion of new business areas: on the one hand, the company strengthens the expansion of the field of new energy and new materials, on the other hand, the number of orders for equipment such as 23H1 integrated heavy metal wastewater treatment equipment reaches 10, with an amount of more than 30 million yuan (year-on-year + 33%).
There is a bright future in the blue ocean market, and equity incentives demonstrate the company's confidence in development. We estimate that the total EPC+ operation market for acid and wastewater disposal in the non-ferrous industry amounts to 20 billion yuan / year, of which 90% of the stock market is still traditional technology, but the company's market share in the new expansion and technological renovation projects in 2021 has reached 62.3%, showing competitive strength. According to the 2023 stock incentive plan, the company's compound revenue growth target for 2022-2025 is 39.6%, showing confidence in development.
Profit forecast and investment advice. It is estimated that the net profit of homing in 23-25 years will be 1.470.250 million yuan, corresponding to the latest PE of 27.6118,73won 13.45 times. The company's technology is leading, superimposed two shareholders' resources are blessed, and the high growth trend remains unchanged; with reference to comparable companies, we give the company 23 years of 30xPE, corresponding to a reasonable value of 31.65 yuan per share, maintaining a "buy" rating.
Risk hint. The risk of industry policy change, the risk of technology iteration, the risk of loss of technical personnel, etc.