郑煤机(601717):煤机板块持续增长 分拆上市助力推升长期价值

Zheng Coal Machinery (601717): The coal machinery sector continues to grow, spin-off and listing help boost long-term value

海通證券 ·  11/08/2023

Net profit for the first three quarters was +26% YoY and +58% YoY in 23Q3. In the first three quarters, the company achieved revenue/net profit of RMB 272.4/2.47 billion, +14.6%/+25.8%, net profit of RMB 2.19 billion, net profit of RMB 2.19 billion, +32.2% year-on-year, mainly through financial income of 160 million yuan, government subsidies of 120 million yuan, and asset impairment of $72 million. In Q3 in a single quarter, the company returned net profit of 786 million yuan, +58%/-12.5% yoy, minus non-net profit of 691 million yuan, +39.9%/-17.7% yoy.

The coal machinery sector grew steadily, and the 23Q3 net interest rate declined. Benefiting from the continued good development trend of the coal industry, the company's coal machine business orders continued to grow. The company's coal machinery sector revenue/net profit for the first three quarters was 141.7/2.49 billion yuan, +14.9%/+32.2% year-on-year, with a net profit margin of 17.6%, +2.3pct year-on-year. In the Q3 quarter, the company's coal machinery sector revenue reached 4.78 billion yuan (slightly lower than 23Q1's 4.79 billion), +4% month-on-month, net profit of 786 million yuan, a decrease of about 100 million yuan, or 11.3%. We believe the main reason was the decline in net interest rate due to rising costs and expenses. The Q3 net profit margin was 16.4%, -2.8pct month-on-month, down 1.7pct from the first half of the year.

Gas-zero revenue has resumed growth, and the profit contribution is worth looking forward to. In the first three quarters, the company's auto zero sector had revenue of 13.09 billion yuan, +14.2% year-on-year, of which ASIMCO's revenue was 3.18 billion yuan, +17% year-on-year, mainly due to the positive recovery of the domestic automobile market this year, the expansion of ASIMCO's new energy business, the increase in overseas business, and the rise in domestic commercial vehicle market demand; SEG's revenue was 9.93 billion yuan, +13.3% year-on-year, mainly affected by fluctuations in the exchange rate between the euro and the renminbi. The net profit/net profit of the company's auto zero sector in the first three quarters was 149/093 million yuan, +5.5%/-2.6% over the same period last year. Among them, Q3 net profit/net profit was 0.47/ 032 billion yuan, -17.6%/-20.5% month-on-month.

The spin-off listing of Hengda Intelligent Control has been accepted, which is expected to increase the company's valuation. Hengda Intelligent Control, a subsidiary of the company, has submitted application materials for the initial public offering of shares and listing on the Science and Technology Innovation Board to the Shanghai Stock Exchange, and received a reply letter on September 25, 2023, deciding to accept it and review it according to law. We believe that if Hengda Intelligent Control is successfully listed, it will help accelerate business expansion and further enhance the company's profitability. At the same time, it helps to raise the company's valuation level (with reference to Tianma Intelligent Control, which has already listed Tianma Intelligent Control, the current market value corresponding to the 23th wind forecast PE is 26.5 times higher).

Profit forecasting and valuation. We believe that the company's coal engine business is growing steadily, the zero-gas business is gradually improving, and the pace of new energy transformation is firm and steady. The overall valuation of Hengda Intelligent Control is expected to improve after the spin-off and listing of Hengda Intelligent Control. We expect the company's net profit from 23-25 to be 33.6/40.5/4.52 billion yuan respectively, corresponding to EPS of 1.89/2.27/2.54 yuan. Referring to comparable companies, we give 10 to 12 times PE in 2023, corresponding to the reasonable value range of 18.87 to 22.65 yuan, maintaining the “superior to the market” rating.

Risk warning. The price of coal has dropped sharply, demand for downstream auto parts has declined sharply, and the price of raw steel has risen sharply.

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