The company's 2023H1 accumulated 11.19 billion yuan in newly signed contracts, with a 34.5% increase in 2023Q2 newly signed contracts of 5.69 billion yuan, a 47.2% increase in sales of 2023H1 steel structure products to 576000 tons, and a 13.0% increase in sales of 2023Q2 steel structure products to 324000 tons, an increase of 11.7%. The company has a high increase in orders and a steady increase in production and sale. under the coordination of light and storage, it is expected to thicken profits and maintain the company's increased rating.

Support the main points of rating

There was a high increase in orders and a steady increase in production and sales: 2023H1 signed a total of 11.19 billion yuan in new contracts, 34.5% new contracts signed by 2023Q2 with an increase of 34.5%, sales of steel structure products of 2023H1 by 47.2%, and sales of steel structure products by 13.0% from 2023Q2 to 324000 tons, with an increase of 11.7%.

Traditional subcontracting orders increased steadily. 2023H1 Company accumulated 5.74 billion yuan in newly signed industrial orders, up 19.8% and 28.1% respectively. Thanks to the demand for new factory buildings brought about by the expansion of production in the automotive and food industries, the company's industrial orders increased steadily. 2023H1's newly signed public construction orders totaled 2.95 billion yuan, with an increase of 18.1% and 75.2% respectively. During the 14th five-year Plan period, investment in airport and high-speed rail construction will be maintained, and public construction orders will resume quickly under the pull of new airports, high-speed rail stations and other projects during the year.

There has been a surge in orders for emerging businesses. 2023H1 company newly signed EPC and prefabricated construction project order 2.21 billion yuan, with an increase of 156.7% and 74.1%, respectively. The company continues to promote EPC transformation, and brand effect helps the company to undertake the project of Xinchang County Ball Center in Zhejiang Province, with a contract amount of 900 million yuan. The newly signed order of 2023H1's industrial chain and strategic franchise business is 190 million yuan, with an increase of 89.4% and 48.9%. The impact of the epidemic has accelerated the clearance of small and medium-sized enterprises in the industry, so that the company can quickly project brand influence through light asset operations and increase market share. With the lower price of components, the company is expected to promote optical storage coordination and thicken profits by virtue of industrial import resources. According to the company announcement, in the Guangxi Changhong Biodegradable Masterbatch Industrial Park project undertaken by the company, the contract amount of distributed photovoltaic part exceeds the steel structure project, and the promotion of BIPV construction may thicken the company's profits.

Valuation

With the recovery of demand, the company's orders increased, production and sales increased steadily, and both traditional subcontracting and emerging businesses achieved good order growth. Maintaining the previous profit forecast, the company's 2023-2025 income is expected to be 180.0 yuan, 211.5 yuan and 25.51 billion yuan respectively, the return net profit is 8.4,10.7 yuan and 1.3 billion yuan respectively, and the EPS is 0.42,0.53,0.65 yuan respectively. Maintain the company's overweight rating.

Main risks faced by rating

Raw material prices fluctuated sharply, BIPV business expansion was not as expected, and downstream demand recovery was not as expected.