This report is read as follows:

The company's performance is in line with expectations, the field of intelligent heating under the background of "double carbon" will usher in rapid development, and is optimistic about the long-term development of the company.

Main points of investment:

Maintain the "overweight" rating and maintain the target price of 97.11 yuan. According to the profit forecast, the company's net profit from 2022 to 2024 is estimated to be 3120.414 million yuan and EPS 5.57 yuan respectively from 2022 to 2024. According to the PE valuation, maintain the target price of 97.11 yuan, maintain the "overweight" rating.

The performance is in line with expectations, Q2 revenue continues to grow at a high level. In the first half of 2022, the company realized operating income of 95.98 million yuan, YOY+35.96%; realized net profit of 19.2 million yuan, and YOY+127.73%; realized net profit of-2.18 million yuan after deducting non-return, which is in line with market expectations. the decline in non-return net profit is mainly due to the receipt of government subsidies of 14.27 million yuan in the current period. Of this total, revenue reached 64.59 million yuan in the second quarter alone, an increase of 31.52% over the same period last year, continuing the high growth trend.

Gross profit margin fluctuated under the influence of raw material prices, and R & D efforts continued to increase. The company's 2022H1 gross profit margin was 49.83%, down 6.35 pct from the same period last year, mainly due to the decline in gross profit margin of intelligent modular heat exchanger units with low gross profit margin and the rise in raw material prices. With the further improvement of the product system, the gross profit margin is expected to show an upward trend in the future. In terms of period expenses, the company's expenditure rate during the first half of 2022 was 42.01%, which remained stable as a whole; the R & D expenditure reached 19.7248 million yuan, an increase of 40.66% over the same period last year, and continued to maintain high R & D investment.

Heating transformation is an important part of "2030 carbon peak", and there is a broad market space for intelligent heating. China's heating stock market, incremental market base, intelligent heating new infrastructure will be the only way to achieve low-carbon heating, a total market scale of hundreds of billions. As a leading intelligent heating solution provider in the industry, Ruina Intelligence will fully benefit from the development of the industry, and the main business will enter a stage of rapid development.

Risk hint. The epidemic led to the lower-than-expected landing of demand and the risk of less-than-expected expansion outside the province.