Event: the company releases its 2023 half-yearly report. 23H1, the company realized revenue of 7.724 billion yuan, yoy+5.9%, net profit / deduction non-net profit of 391 million yuan, yoy+3.0%/+2.0%;23Q2 single quarter, revenue of 4.003 billion yuan, yoy+12.13%, net profit / deduction of 218 million yuan, yoy+4.2%/-3.3%. The performance is basically in line with expectations.

23H1 steel structure sales increase steadily, revenue and performance are solid.

23H1, the company realized steel structure sales of 576000 tons, yoy+13%, realized revenue of 7.724 billion yuan, yoy+5.9%, realized net profit / deducted non-net profit of 391 million yuan, yoy+3.0%/+2.0%. From a sub-business point of view, the revenue of steel structure / integration and EPC business is 6744 million yuan and 791 million yuan respectively, yoy+21.5%/-49.9%. 23Q2, the company achieved steel structure sales of 324000 tons, yoy+11.7%, home net profit / deduction non-net profit of 211 million yuan, yoy+4.2%/-3.3%.

23H1 gross profit margin rebounded, operating cash flow improved significantly

In terms of gross margin: 23H1, the company's comprehensive gross profit margin is 14.15% 0.11pct. From a quarterly point of view, the comprehensive gross profit margin of 23Q1/23Q2 is 14.05%, 14.25% and 14.25% respectively + 0.71/-0.52pct.

In terms of expenses: 23H1, the expense rate for the period of the company is 4.81% correspondingly 0.24pct, in which the rate of sales / management / finance / R & D expenses is 1.05% 3.37% 0.40% and 4.05% respectively. When the rate of financial expenses decreases, the interest expense of the main department decreases.

Cash flow: 23H1, the company's operating cash flow net inflow of 66 million yuan, year-on-year inflow of 460 million yuan, 23Q2, operating cash flow net inflow of 261 million yuan, year-on-year inflow of 372 million yuan. Cash flow improved significantly, and the main company received an increase in the amount of money received for the sale of goods.

There is a high increase in the new signing of 23H1, and the growth rate of EPC and prefabricated buildings is bright.

Newly signed orders and high sales volume. 23H1 has signed a total of 224 new projects, with a total project value of 11.19 billion yuan, an increase of 34.5% over the same period last year. In terms of business, the company's newly signed professional subcontract integration business contract amount was 8.69 billion yuan, an increase of 19.5% over the same period last year, of which 5.74 billion yuan was for industrial construction, an increase of 20.2% over the same period last year, and 2.95 billion yuan for newly signed public construction projects, an increase of 18.1% over the same period last year. The amount of contracts signed for EPC and prefabricated construction projects was 2.21 billion yuan, a big increase of 156.7%. Among them, Zhejiang Xinchang County small Ball Center project signed a large amount of 900 million yuan, the project is the company following the Hangzhou Asian Games bat (base) ball sports and cultural center project, Gansu Zhangye Olympic Sports Center construction project and other projects after the EPC model to undertake major sports venues projects.

The main business is advancing steadily, and the BIPV business is expected to increase its income and profit.

1) steady progress of the company's main steel structure business: the main contracted customers include BYD, Geely, BMW, Haitian Flavor, Jinmai Lang, Fanuke, Market opener, Holland Quaternus and other emerging industries or countercyclical industry leading enterprises, to provide support for the steady progress of the company's business in the future. 2) BIPV business is expected to increase profits: at the strategic cooperation end, the company has signed cooperation agreements with Minshi Group, Changhong Hi-Tech and other companies on distributed photovoltaic power generation projects to achieve a new breakthrough in BIPV business. On the order side, 23H1, the company signed 33 million yuan for distributed photovoltaic BIPV business to cooperate with the State Power Investment Group to set up a joint venture Changjiang Seiko (Shanghai) New Energy Co., Ltd., in the form of "development + investment + construction + transfer" to promote the development of BIPV new energy field, open up the capital and assets of BIPV industry chain, help the company to give full play to the advantages of high-quality roof resources and promote the development of BIPV business. And further promote the development of the main industry of steel structure and enhance the overall profitability.

Profit forecast and investment advice: considering the company's deep ploughing of steel structure in the industrial field, the continuous layout of BIPV, the order unit price and profit are expected to rise strongly. We expect the company's operating income from 2023 to 2025 to be 187.33, 223.55 and 25.32 billion yuan, an increase of 19.9%, 19.3% and 13.3% over the same period last year, and the net profit of the parent is 8.69,10.46 and 1.219 billion yuan, an increase of 23.1%, 20.3% and 16.5% over the same period last year, corresponding to EPS of 0.43,0.52,0.61 yuan. The corresponding PE of current price is 8.73,7.26,6.23 times. Maintain a "buy" rating.

Risk tip events: steel structure prefabricated building penetration rate is not as fast as expected; raw material price fluctuation risk; the company's BIPV business development is not as expected.