Main points of investment
Reduce low gross margin orders, profit declined due to business transformation in the first half of 2023, the company achieved operating income of 464 million yuan, down 16.88% from the same period last year; return net profit-53 million yuan; deducting non-return net profit-63 million yuan. Of this total, the total income in the second quarter was 307 million yuan, down 29.34% from the same period last year; and the gross profit margin was 25.26%, up 2.05% from the same period last year. The decline in revenue in the first half of 2023 was mainly due to the company's reduction in the execution of some orders with lower gross margins compared with the same period last year. At the same time, the company maintained high investment in technological research and innovation, with R & D investment of 91 million yuan in the first half of 2023, an increase of 19.92% over the same period last year; at the same time, the company increased its market layout and sales expenses increased by 24.10% compared with the same period last year.
The new production capacity of lithium testing equipment is about to be released, and the company's lithium battery testing related equipment has been replaced by imports, which can provide a full range of lithium battery testing product solutions from research and development to application. The company's test equipment has 20369 channels of production capacity, and the fund-raising project "New Energy vehicle Battery Intelligent Manufacturing equipment and Intelligent Power Station Converter Control system industrialization Project" has been completed in June 2023, and the new production capacity is expected to be released gradually. The nebula voltage internal resistance test system of the company has been officially released, opening up a business development path from multi-category "special" battery testing equipment to "general" instrument product R & D and production. marks the company's business into the field of high-precision standardized instruments.
The products of energy storage and charging piles have entered the market promotion stage, and the optical storage, charging and overcharging stations accelerate the landing of energy storage. In March 2023, the company's "megawatt high voltage energy storage converter" was selected into the list of DSM products in the national industrial field of the Ministry of Industry and Information Technology, which laid a foundation for the promotion of the company's energy storage products in the electric power field. In August 2023, the company announced that it plans to invest 1.058 billion to build a nebula energy storage system and battery key components manufacturing and testing center project; the company's "optical storage, charging and inspection intelligent overcharge station" supports a maximum voltage of 1000V, which can support the promotion and application of 800V and higher voltage platform models of new energy vehicles in the future, and is expected to benefit from the volume of 800V models.
Profit forecast and valuation
Downgrade earnings forecast and maintain "overweight" rating. The company is the leading supplier of lithium power equipment in China, and new businesses such as energy storage and charging piles are expected to contribute to performance increment. Considering the reduction of low gross margin orders, we downgrade the company's profit forecast for 23-25 years. It is estimated that the net profit for 23-25 years is 0.50,2.12 and 309 million yuan respectively (1.80,3.03 and 421 million yuan for 23-25 years respectively), and the corresponding EPS is 0.34,1.44,2.09 yuan. The corresponding PE of the current stock price is 73,17,12 times respectively. Maintain the "overweight" rating.
Risk hint
Sales of Xinneng cars fall short of expectations, market competition intensifies, and new product development falls short of expectations.