Event description
The company released its mid-2023 report that revenue in the first half of the year was 2.282 billion yuan, a decrease of 2.43%, a net profit of 230 million yuan, an increase of 82.72%, and a non-return net profit of 193 million yuan, an increase of 82.48%.
Event comment
Elevator revenue increased year-on-year, escalator business declined year-on-year. In the first half of 2023, the company's revenue decreased by-2.43%. In terms of products, the revenue of elevators, escalators, spare parts, installation and maintenance, and others was 15.3,2.2,1.0,4.0 and 40 million yuan respectively, with year-on-year growth rates of 44.89%,-72.46%,-21.73%, 14.98% and 54.44%, respectively. Among them, the high increase in elevator business was mainly due to the acceleration of real estate completion driven by the "Baojiaolou" policy, while the escalator business declined compared with the same period last year, mainly due to the long order execution cycle of rail transit projects.
Profitability rebounded significantly, mainly due to the decline in steel prices, cost reduction, efficiency and product structure changes.
In the first half of 2023, the company's home net profit increased by 82.72% compared with the same period last year, of which gross profit margin also increased to 28.66%. Profitability rebounded significantly, mainly due to the decline in steel prices, cost reduction, efficiency and high gross profit elevator business accounted for an increase. During the period of the company, the expense rate increased by 1.06pct to 17.66%, of which the sales, management, R & D and financial expense rates increased by 0.69pct, 0.18pct, 0.13pct and 0.05pct to 9.93%, 3.66%, 4.18% and-0.11%, respectively.
The cash flow is bright, the cash-to-cash ratio increases, and the cash-to-cash ratio decreases. In the first half of the year, the company had a net inflow of operating cash of 357 million yuan, an increase of 366 million yuan over the same period last year, mainly due to an increase in cash received from the sale of goods and services over the same period last year. The unit price of raw materials decreased, the corresponding procurement expenditure decreased, and the payment to suppliers decreased compared with the same period last year. The ratio of receipt to cash increased by 10.37pct and-5.24pct to 116.36% and 101.72% respectively.
With full orders on hand, rail transit projects are expected to strengthen the company's ability to cross the cycle. As of 2023-6-30, the valid order being executed by the company is 8.082 billion yuan, and the order on hand is full.
The order amount of the company's rail transit escalator (including high-speed rail, airport) project is about 2.2 billion yuan, and the escalator income in the next three years is guaranteed, which is expected to strengthen the company's ability to cross the cycle.
After the development of market business, it is expected to increase the valuation in the long run. While deeply ploughing the new ladder business, the company increases its investment in the post-market field, strengthens the cooperation with strategic customers and partners in the whole life cycle business, and strives to improve the operating ability of the market after the branch. The second growth curve of the market business is strengthened and enlarged. Take Otis, an overseas elevator leader, as an example, its sales services (after market) account for nearly 60% of revenue, and PE (TTM) is valued at more than 26 times in 2022. We believe that with the gradual development of the company's market business, its valuation is expected to be closer to overseas leaders in the long run.
The company's products, channels and service capabilities are outstanding, and the influence of independent brands is increasing year by year. On the product side, it has mature intelligent manufacturing and rapid delivery capabilities, and continues to deepen the intelligent manufacturing model of the whole life cycle of digital empowered products, and continuously improve the ability of end-to-end delivery to customers.
At the channel end, the company has established a nationwide marketing network and after-sales service system, complementing each other through direct sales and agency, and relying on high-quality, differentiated comprehensive solution capabilities and global after-sales service capabilities. continue to enhance the stickiness of old customers. The influence of the company's own brand has increased year by year, and has been selected as "Global Elevator manufacturer Top10" and many other honors for seven consecutive years from 2017 to 2023.
Profit forecast and valuation
It is estimated that the company's operating income from 2023 to 2025 will be 46.90%, respectively, with a year-on-year growth rate of-8.30%, 9.30%, 9.90%, and 4.11%, respectively, with a year-on-year growth rate of 49.71%, 6.85% and 7.26%, respectively. The company's performance in 2023-2025 corresponds to a PE of 17.48, 16.36, 15.25 times respectively, covering for the first time and giving an "overweight" rating.
Risk Tips:
Real estate completion data dropped sharply; post-market development was less than expected; raw material prices fluctuated.