Event description
The company reported that the revenue of 2023H was about 1.31 billion yuan, an increase of 42% over the same period last year, and the attributable net profit was about 55 million yuan, an increase of 157% over the same period last year. The deduction of non-net profit was about 22 million yuan, down 34% from the same period last year. 2023Q2 revenue is about 800 million yuan, an increase of 34% over the same period last year, and a net profit of about 21 million yuan, an increase of 61% over the same period last year, deducting non-net profit of about 19 million yuan, down 38% from the same period last year.
Event comment
Income has recovered substantially, and the channel structure has been continuously optimized. The company's revenue in the first half of the year was 1.31 billion yuan, up 42% from the same period last year, of which Q1 and Q2 increased by 56% and 34% respectively. In terms of categories, the company's waterproof roll material revenue increased by 36% compared with the same period last year, and waterproof paint revenue increased by 39% compared with the same period last year. The company continues to vigorously develop the dealer model, sink through channels, increase regional sales resources, and vigorously expand the broad market of industrial buildings, municipal buildings and civil buildings. At the same time, the company expanded the application scene of polymer waterproof materials, relying on the polymer building materials industrial park, using imported TPO and PVC waterproof roll material production lines, launched an integrated photovoltaic roof system matching the 25-year life cycle of photovoltaic, and developed a variety of application scenarios such as single-layer roofing and planting roofing.
The price of asphalt is still relatively high, and the profit recovery is not significant. The company's gross profit margin in the first half of the year was about 24.1%, an increase of 0.6pct over the same period last year, of which the gross profit margin of waterproof roll materials was about 26.5%, a decline of 1.5pct compared with the same period last year. The main reason is that the price of raw material asphalt is still relatively high. Although the price of asphalt in the first half of last year was low before and after high, and the pressure was reduced in the second quarter, there was little difference in the overall first half of the year. According to Longzhong information, the national average price of asphalt in 2023H only decreased by 0.5% compared with the same period last year. The gross profit margin of waterproof coatings is 31.9%, an increase of 12.4pct over the same period last year, or mainly due to downward costs such as emulsions. During the first half of the year, the company's expense rate was about 19.2%, a year-on-year decline in 1.6pct, in which sales, management, R & D and financial rates changed by + 1.4,-5.1, + 0.2, and + 1.9pct, respectively. Equity incentives led to more management expenses in the same period last year. The company's credit impairment loss in the first half of the year is about 31 million yuan, which is about-7 million yuan in the same period last year. Other income is about 36 million yuan, and about 11 million yuan in the same period last year, mainly due to the increase in government subsidies received in the current period. The final net interest rate for the first half of the year was about 4.2%, an increase of 1.9 percentage points over the same period last year.
Operating cash flow has improved to a certain extent. The net cash flow generated by the company's operating activities in the first half of the year is about-80 million yuan, compared with-330 million yuan in the same period last year, and-80 million yuan has been the best in the same period since 2020. The cash-to-income ratio did not fluctuate much, falling to 0.98 from 1.01 in the same period last year, while the cash-to-cash ratio improved significantly to 1.03 from 1.25 in the same period last year. Although the company's income increased significantly in the first half of the year, accounts receivable and notes receivable did not change much, rising only slightly from 2.04 billion yuan at the end of 2022H to 2.12 billion yuan at the end of 2023H. finally, the turnover days of accounts receivable in the first half of the year decreased from 333 days in the same period last year to 258 days this year.
The company continues to vigorously develop the dealer model, expand the sales market through channel sinking, optimize the income structure, and actively expand the application scene of polymer waterproof materials, promote the cross-border integration of photovoltaic and building waterproofing, and open up new growth points. It is estimated that the attributable net profit from 2023 to 2024 is 1.50 yuan and 270 million yuan, corresponding to the valuation of PE 36, 20 times, continue to recommend.
Risk hint
1. The real estate industry rebounded less than expected.
2. The price of raw materials continues to rise.