Incident: The company disclosed its 2023 semi-annual report. In the first half of the year, it achieved main business revenue and total revenue of 495 million yuan (YoY +28%), net profit of 175 million yuan (YoY +4%), and profit of 0.18 yuan per share (same period last year: 0.17 yuan).
Platform-based transformation is advancing, and the scale of business is expanding at an accelerated pace. 2023H1's platform service business achieved revenue of +130% year-on-year to 67 million yuan, mainly driven by the expansion of the platform's inclusive matching business. As of 2023H1, the company's platform linked capital partners to +34% to 122, and the cumulative number of platform customers +20% to 13,655, with micro, small and medium-sized customers accounting for more than 98%.
Low base+ project implementation, high supply chain technology revenue. 2023H1's supply chain technology service business achieved revenue of +5763% year-on-year to 17 million yuan (same period last year: 0.3 million yuan), mainly due to the completion of smart construction sites and hospital SPD projects in the first half of the year. In terms of infrastructure, Shengye Factoring, a wholly-owned subsidiary of the company, and China Railway Capital Factoring achieved a joint factoring business system, increasing the scale of business investment cooperation to 1.5 billion yuan; on the pharmaceutical side, the company and Heavy Pharmaceutical Holdings signed a strategic cooperation in the health sector. As collaboration and cooperation between the company and core enterprises in industry segments continues to deepen, I am optimistic that the company will promote the accelerated implementation of digital supply chain construction solutions.
Digital finance is growing steadily, and the scale of assets continues to expand. Under the combination of digital technology and industry accumulation, 2023H1's digital finance solutions business achieved revenue of +17% year-on-year to 355 million yuan, mainly due to an increase in the average daily loan balance, which led to an average daily supply chain asset balance of +53% to about 12.6 billion yuan.
Investment advice: Maintain a buy-A investment rating. The company's platform-based development strategy continues to advance, the business map continues to expand, and the ecological layout has achieved remarkable results. In the future, accelerated integration between funders and important participants in the supply chain ecosystem will further promote the company's platform-based development and win-win industrial collaboration. We expect the company's EPS for 2023-2025 to be $0.31, $0.41, and $0.49, respectively. The target price is HK$5.62, corresponding to 1.3 times the 2023 P/B (converted exchange rate).
Risk warning: large fluctuations in the capital market/strategy progress falls short of expectations/macroeconomic downturn