Event: the company released its mid-2022 report. During the reporting period, the company realized revenue of 742 million yuan,-7.86% compared with the same period last year, and realized net profit of-21 million yuan,-126.76 & compared with the same period last year. Among them, the revenue in the second quarter was 335 million yuan,-12.44% compared with the same period last year, and the net profit returned to the mother was-39 million yuan,-224.26% compared with the same period last year. The comments are as follows:
Revenue side: the logistics restriction caused by the epidemic is the main reason for the decline in revenue. 2022H1's revenue fell 7.9% from a year earlier, and second-quarter revenue fell 12.4% from a year earlier. The main reasons for the decline in revenue are: (1) outbreaks in Jilin, Shanghai and other places during the reporting period, resulting in poor logistics and transportation of the company, on the other hand, the production end of major customers such as the Great Wall is also limited, the current sales are not up to expectations; (2) the company has carried out a strategic contraction in its home appliance parts business. With the easing of the epidemic and the release of new orders in 2021, we expect revenue to improve year-on-year.
Gross profit margin: 2022H1's gross profit margin was 12.4%, down 13.6 pcts from the same period last year, mainly due to rising prices of raw materials and natural gas. From a quarterly point of view, the company's gross profit margin was 8.18% in the second quarter and 15.9% in the first quarter. The promotion of the price adjustment mechanism with customers on the rise in aluminum prices has been reflected in the first quarter, and the month-on-quarter decline in the second quarter is due to the low utilization of capacity under the influence of the epidemic. The fixed costs that need to be shared are higher.
Expense side: during the reporting period, the company's sales expense rate was basically the same, while the management expense rate was 7.5%, an increase of 2.1pcts over the same period last year, mainly due to the relevant investment of the company's subsidiaries under construction and the increase in related expenditure matched with business development. During the reporting period, the company's R & D expenditure rate was 11.3%, an increase of 3.6 pcts over the same period last year, mainly due to the company's increased layout of new energy automobile parts business, and related development and trial production costs continued to increase. We judge that with the expansion of new projects and the improvement of capacity utilization, the company's profitability will improve.
In the medium and long term, the growth logic of the two core businesses of valve products and new energy vehicle products remains unchanged, and the integrated die casting business opens up a new space for development. Valve products: DCT valve plate is the company's advantage products, the company has rich production experience in valve products, the main customers are BergWarner, BYD, Great Wall and so on. In 2022, the company won the order for the valve block project of the body stabilization system, which will expand the application field of valve products from the transmission system to other areas, which will become a new business growth point. New energy vehicle products: motor and electric drive shell business are the traditional advantage projects of the company's new energy business. in 2021, the company won battery component project orders such as battery end plates and battery trays, expanding the new energy business to the battery field. At present, the company has been able to use integrated die-casting to produce double motor shells, battery trays and other products. The price of the new energy unit of the company is much higher than that of the traditional products, and the integrated die casting process can improve the production efficiency of the company, which will be the bright spot of the company's development in the future. In terms of capacity planning, Nanjing headquarters takes new energy business and valve products as the core, and Maanshan production base is the company's integrated die-casting production center. At present, a 4400T die-casting machine has been put into production, 4000T and 4200T die-casting machines are being debugged and installed, 6000T and 8000T die-casting machines are expected to arrive at the factory by the end of this year, and the Hungarian factory will be put into production in the first half of next year.
Profit forecast and investment rating: affected by the epidemic, the company's performance is under short-term pressure. in the medium and long term, we are optimistic about the market competitiveness and high growth of the company's core business such as new energy vehicle products and valve products. It is estimated that the return net profit of the company from 2022 to 2024 is 1.25,2.56 and 412 million yuan respectively, and the corresponding EPS is 0.62,1.27,2.05 yuan respectively. The closing price on August 22, 2022 corresponds to the PE value of 54, 26 and 16 times from 2022 to 2024, respectively. Maintain the "highly recommended" rating.
Risk tips: passenger car sales are not as expected; upstream raw material prices are rising; lack of core recovery is not as expected; new capacity construction progress is not as expected.