Core views:
The company's revenue and performance grew steadily in 23Q2. According to the interim report, the company 23H1 achieved revenue of 18.22 billion yuan, +17.3% year-on-year, net profit of 16.8/1.5 billion yuan, +14.8%/+28.9% year-on-year respectively; of these, Q2 achieved revenue of 9.01 billion yuan, +21.0%/-2.3% of the same period, and realized net profit of 900.84 billion yuan, respectively, +14.7%/+41.3% year-on-year, +14.7%/+27.5%.
Mining machine sector: 23H1 The coal machine sector achieved operating income/net profit of 93.9/1.62 billion yuan, respectively, +19.3%/+26.1% year on year; in the first half of the year, orders and repayments in the coal machine sector increased 45%/33% year on year, respectively, and both reached record highs. The company continues to cultivate intelligent and complete technical products, empowers intelligent manufacturing through digitalization, and helps increase coal production capacity.
Auto zero sector: 23H1 The auto zero sector achieved operating income/net profit of 8.83/60 billion yuan, respectively, +15.2%/-66.1% from the previous year. The decline in profit was mainly due to a decrease in asset disposal income compared to the same period last year. ASIMCO: 23H1 achieved revenue of 2.22 billion yuan, +15.2% year-on-year. The year-on-year increase in revenue was mainly due to the expansion of the new energy business, the increase in overseas business, and the recovery in domestic commercial vehicle market demand; 23H1 achieved net profit of 180 million yuan. ASIMCO continues to consolidate and enhance its dominant position in its core business, continue to develop new energy businesses, rapidly promote the development of new products such as air suspensions, and obtain customer targets. With its globalization and category expansion strategies, ASIMCO is expected to achieve continuous growth in revenue and performance. SEG: 23H1 achieved revenue of 6.63 billion yuan, +15.2% year-on-year. Revenue growth was mainly due to growth in the automobile market in India, China, etc., and 23H1's net profit was -70 million yuan.
Profit prediction and investment advice: After further optimization of the governance structure, the company is an excellent high-end manufacturing enterprise led by a management with a methodology and a focus on medium- to long-term development strategies. The growth of coal machinery comes from intelligence and automation, and zero automobile growth comes from internationalization and new energy. We expect the company's EPS in 23-25 to be 1.76/2.18/2.63 yuan/share. Combined with the historical valuation of A/H shares, we will give A shares 15 times PE in 23 years, a reasonable value of 26.4 yuan/share, H shares 12 times PE in 23 years, a reasonable value of HK$22.8 per share (exchange rate of HK$1.08 = RMB 1), and maintain the “buy” rating for A/H shares.
Risk warning: The prosperity of the coal industry is declining; the improvement in the zero automobile business falls short of expectations, etc.