The decline in short-term income will not change the momentum of long-term development, and the future trend will be better.
2023H1, the company achieved revenue of 559 million yuan, down 3.12% from the same period last year; net profit from home was 21.64 million yuan, up 5.39% from the same period last year; and net profit from non-return was 22.62 million yuan, up 13.64% from the same period last year. The company's revenue declined slightly, mainly because the progress of project implementation during the reporting period lagged behind that of previous years, and the amount of completed projects decreased slightly.
2023H1, the company's gross profit margin is 28.07%, up 2.17% from the same period last year; the net profit margin is 4.14%, up 0.36% from the same period last year, and the company's profitability has improved. Taking into account the slight decrease in the company's revenue recognition in the first half of the year, we downgrade the company's profit forecast and estimate that the 2023-2025 net profit is 1.07 pounds 1.53 / 220 million yuan (the previous value is 1.34 pounds 2.08 million pounds), the EPS is 0.68 pounds 0.97 pounds 1.40 yuan, and the current share price corresponds to 20.2 pounds 14.1 pounds 9.8 times. The company's cooling tower business benefits from demand growth in thermal power, data center, nuclear power and other areas, as well as Belt and Road Initiative market expansion, abundant orders on hand, strong momentum for future development, and maintain a "buy" rating.
Belt and Road Initiative's going out to sea is accelerated, orders on hand are high, and the momentum of long-term development is strong.
By the end of June 2023, the order on hand of the company was 3.593 billion yuan, an increase of 48.8% over the same period last year, and the contract liability was 938 million yuan, an increase of 52.6% over the same period last year. This is mainly due to the company's active market development and sustained growth in domestic and foreign market orders. Overseas market, the company through the acquisition of Malaysia Truwater cooling tower company, actively explore the Southeast Asian market, and establish a good brand effect in Southeast Asia. In addition, there is a large space for refined oil refining and chemical expansion in the Middle East, which is expected to bring growth in metallurgical, chemical, power and other industrial projects after the conflict between Russia and Ukraine, as well as long-term development opportunities for the company's cooling tower order growth, and the company has strong momentum in the future.
Continuously guarantee R & D investment and actively expand high-value cooling tower products
In the first half of 2023, the company continued to guarantee its investment in research and development, focusing on technological breakthroughs in high mechanical ventilation cooling towers, green low-carbon water-saving closed cooling towers, dry-wet separation closed cooling towers, and water-saving cooling towers. The above cooling towers have higher value and higher profit margins than conventional cooling towers, and the company continues to expand the market development of high-value cooling towers. It is expected to promote the company's profitability.
Risk tips: the expansion of high-value products is not as expected; "Belt and Road Initiative" going out to sea is not as expected; the risk of exchange rate fluctuations.