Event description
Yunlu shares released its mid-2023 report, with revenue of 850 million yuan in the first half of the year, an increase of 33% over the same period last year, and a net profit of 160 million yuan, an increase of 82% over the same period last year. Of this total, 23Q2 realized revenue of 460 million yuan, an increase of 33% over the same period last year, and a net profit of 91 million yuan, an increase of 75% over the same period last year.
Event comment
On the revenue side, the company's 23H1 and 23Q2 both maintained more than 30% year-on-year growth, which is expected to be mainly due to the continuous release of production capacity in 2022, while increasing market development efforts, enhanced market supply capacity, and substantial growth in operating income; and 23Q2 revenue increased by 20% month-on-month, which is expected to be mainly due to the further increase in shipments. In terms of products, the company has built the largest amorphous strip production base in the world, continuously increasing market development efforts in the domestic market in areas such as power grid, rail transit and new energy power generation, and overseas on the basis of stabilizing the market share of Southeast Asia. Gradually deepen cooperation with customers in the Americas and other regions, the proportion of overseas revenue of amorphous products has reached nearly 50%. The stability and reliability of the soft magnetic powder products are improved, and the sales volume is steadily increasing. At the same time, the soft magnetic powder core in the automotive field has been promoted to the world-famous companies; the nanocrystalline products have obtained the supplier qualification of the world-famous companies and world-famous automobile companies, and the market popularity continues to rise.
At the profit end, the gross profit margins of 23H1 and 23Q2 were 30.0% and 30.8% respectively, increasing 6.0pct and 6.8pct over the same period last year, mainly because the company controlled production costs through procurement mode, strategic cooperation, lean management and other ways, while strengthening process optimization and improvement efforts to achieve cost reduction and efficiency; 23Q2 gross profit margin increased 1.7pct compared to the previous month, indicating that the company is constantly strengthening efforts to reduce costs and increase efficiency. In terms of expenses, the expense rate during 23H1 and 23Q2 decreased respectively compared with the same period last year, 1.6pct and 0.6pct, among which the decline in management expense rate was mainly due to the company's continuous lean management, fee reduction and efficiency efficiency, intermediary service fees, publicity fees, consulting fees and other related fees, and the decline in R & D expenditure rate was mainly due to the fact that the revenue growth rate was higher than that of R & D expenses. In the end, the net profit growth rate of 23H1 and 23Q2 is 82% and 75% respectively, which is significantly higher than the revenue growth rate.
According to other financial indicators, the net operating cash flow of 23H1 was 150 million yuan, an increase of 193% over the same period last year. The final inventory of 23H1 increased by 37% compared with the end of last year, which is expected to be mainly due to the expansion of production scale, the increase of orders, and the increase of the company's stock.
Looking forward to 2023, it is expected that under the background of energy-saving transformation of distribution network transformers, the company is expected to maintain a strong amorphous production intensity (according to our statistics, the permeability of amorphous transformers in the bidding of national network distribution transformers in the first half of 2023 is about 26%. Compared with 2022, and we expect that the permeability of amorphous transformer will continue to increase in the future); and nanocrystals are expected to achieve breakthroughs in the application field. It is estimated that the net profit attributable in 2023 is 320 million yuan, corresponding to about 29 times of PE. Maintain a "buy" rating.
Risk hint
1. The bidding quantity of amorphous transformers in power grid is less than expected.
2. The market development of the company's nanocrystal products and magnetic powder products is not as expected.