The 2022 results fell short of our expectations
The company announced its 2022 results: revenue of 9.94 billion yuan, +3.7% year on year; net profit of the mother was 270 million yuan, or -34.9% year on year. The performance fell short of our expectations due to the slowdown in the project process and loss of investment income last year.
The company's gross margin increased 1.3ppt to 15.2% year on year in 2022, mainly due to the increase in gross margin of the steel structure business. The gross margin of the specific steel structure/building materials/service industry was +1.3ppt/-1.5ppt/-1.0ppt, respectively; the sales/management/R&D/financial expense ratio was -0.3ppt/+0.5ppt/+0.9ppt/+0.2ppt respectively. Among them, the increase in management expenses was mainly due to the increase in the company's R&D investment; the total investment income and asset disposal income came from above The year's 250 million yuan turned into a loss of 54.08 million yuan. Investment income was mainly due to losses in the disposal of transactional financial assets; credit+ asset impairment losses increased 21% year over year to 120 million yuan, mainly due to increased credit impairment losses; net interest rates decreased 1.6ppt to 2.7% year on year, and net interest rate after deducting non-net interest rate decreased 0.3 ppt to 1.9% year on year. In 2022, there was a net operating cash flow of 840 million yuan, a year-on-year decrease of 68.55 million yuan; the net outflow of investment cash flow was 7.0 billion yuan, an increase of 4.1 billion yuan over the previous year, mainly due to the establishment of new subsidiaries to build plants and purchase equipment.
Development trends
Revenue from steel structures is growing steadily, and attention is being paid to the subsequent fulfillment process of on-hand orders. The company's steel structure revenue in 2022 was +7.1% year on year to 8.91 billion yuan, a steady increase (+33.9% year on year in 2021). We think this was mainly due to the slowdown in the progress of the company's projects last year under the influence of the epidemic and the like. The amount of new contracts signed for steel structures in 2022 was 12.04 billion yuan, +12.4% year-on-year, up 5.8ppt from '21. We think this shows that the demand for steel structures is still relatively good. We are optimistic about the subsequent increase in the amount of new contracts signed. Currently, the company has orders of 11.34 billion yuan for steel structures, and the order guarantee multiplier is 130 million yuan. We believe that with the moderate pace of project resumption after the Spring Festival this year, the company's on-hand orders are expected to accelerate and support the company's revenue growth. We pay attention to the company's revenue fulfillment and growth in new contracts this year.
Follow the progress of BIPV product development and pilot line production of laminated batteries. In April 2022, the company increased its shareholding in Hete Optoelectronics to 65%; in May of the same year, the company's shareholders' meeting approved the employee shareholding plan. The conditions for the first exercise were: the 100 MW perovskite/crystalline silicon thin-film laminated battery with high conversion efficiency was put into operation within 12 months from the date of review and approval by the shareholders' meeting, and the battery conversion efficiency reached more than 28%. According to the company announcement, by the end of 1Q23, PVD, PECVD and other equipment required for the pilot line had entered the market, and the team was actively installing and debugging, but currently they are cautious about the certainty of the original expectations. It is recommended to pay attention to the progress of subsequent BIPV product development and the commissioning of the laminated battery pilot line.
Profit forecasting and valuation
Keep the ratings unchanged. Considering the slowdown in project progress and investment losses last year, the company's 23e net profit was lowered by 17% to 4.2 billion yuan, and 24e's net profit was introduced by 480 million yuan. Currently, the company is trading at 26x/22x23e/24e P/E. Considering that the BIPV business is expected to provide new growth momentum for the company and keep the company's target price unchanged, corresponding to 28x/24x 23e/24e P/E, 8% upward space.
risks
The construction process of the project fell short of expectations, and the commissioning of BIPV products fell short of expectations.