Overview of events

The income / return net profit / deduction of non-return net profit / net operating cash flow of 23H1 was 5.01, 0.05 and 1.37% respectively, down 71.61%, 111.52%, 153.61%, mainly due to the increase in sales and management expenses and the decline in net income on investment.

The higher net operating cash flow than the net profit is mainly due to the increase in depreciation, amortization and accounts payable.

The income / return net profit / deduction non-return net profit of 23Q2 company is 2.97 billion yuan, up 14.6%, 230.4%, 481.8%, respectively. The growth rate of net profit of single quarter is higher than that of income, mainly due to the increase of gross profit margin and the decrease of expense rate. The growth rate of deducting non-return net profit is mainly due to the higher government subsidy of 22Q2, and the government subsidy of 23H1 is reduced by 90% compared with the same period last year.

Analysis and judgment:

The intelligent training system strengthens the business resilience of driving training and promotes the growth of flight training. Revenue split: (1) Sub-industry: 23H1 core business driving training / flight training income is 4.06 / 72 million yuan, year-on-year growth of-2.0% and 14.7% respectively. The slight decline in income is mainly due to Q1 being repeatedly affected by the epidemic and varying degrees of suspension of business in various places, and Q2 has recovered. (2) Sub-region (shareholding / holding company): Beijing / Yunnan / Shijiazhuang / Shandong / Jingzhou Oriental Fashion / Aviation / testing income is 0.43, 0.09, 0.16, 0.75, 000, 000,

The increase in gross margin mainly benefited from cost reduction and efficiency, while the decrease in net interest rate was mainly due to the increase in the rate of sales and management expenses and the increase in profit and loss of minority shareholders.

(1) the gross profit margin of 2023H1 was 45.72%, an increase of 2.22PCT over the same period last year, mainly due to cost reduction and efficiency improvement. The 2023H1 homing net interest rate was 0.94%, down 2.33PCT from the same period last year. The decline in net interest rate was mainly due to the increase in the rate of sales and management expenses. In terms of expense rate, the 2023H1 sales / management / R & D / financial expense rate was 5.0%, 27.1%, 1.1%, 7.4% and 7.4%, respectively, an increase of 0.5/2.8/-1.37/0.05PCT over the same period last year. The income / income from asset disposal was 0.15%, an increase of 0.25PCT over the same period last year; net investment income / income decreased by 0.5PCT to-0.1%; income tax / income increased by 0.59PCT to 4.27%; and minority shareholders' profit, loss / income increased by 1.49PCT to 0.52%. (2) from the perspective of subsidiaries, the net interest rates of 2023H1 Shandong Oriental Fashion / Shijiazhuang Oriental Fashion / Jingzhou Oriental Fashion / Yunnan Oriental Fashion / Oriental Fashion International Aviation are-133% Universe 116% Citrus 12% Citrus 15% Plus 20%, an increase of 13.9/-2.9/20.6/34.1/-1.6PCT compared with the same period last year, and the profit situation of Yunnan Company continues to improve after break even in 2020. (4) 23Q2 gross profit margin is 52.88%, increasing 8.15PCT compared with the same period last year. 23Q2 net interest rate is 9.68%, year-on-year growth rate of 6.32PCT Q2 net profit margin is lower than gross profit margin mainly due to the decline of other income. 2023Q2 sales / management / R & D / financial expense rates are 4.87%, 22.95%, 1.07%, 5.94%, respectively,-0.11/0.13/1.29/1.86PCT, and other income / income is down 3.42PCT.

The number of days of inventory turnover increased. The inventory of 2023H company was 250 million yuan, down 3.0% from the same period last year, and the inventory turnover days was 167days, an increase of 77 days over the same period last year. The company's accounts receivable were 37 million yuan, down 10.88% from the same period last year, and the average turnover days of accounts receivable was 11 days, an increase of 1 day compared with the same period last year. The company's accounts payable was 271 million yuan, down 4.46% from the same period last year, and the average turnover days of accounts payable was 181days, 17 days less than the same period last year.

Investment suggestion

According to our analysis, (1) at present, the order for civil aviation pilot training is about 247 million yuan, and the order is abundant; (2) the main business is expected to recover after the epidemic, the elimination of classes after the epidemic is expected to increase, and the industry is expected to clear further; (3) the future growth of the company lies in the laying of VR equipment, which is expected to increase this year. (4) according to the announcement, the company will also expand its business to other sub-industries of the automobile consumption integrated service industry in the future, such as vehicle sales, car rental, customized insurance, car maintenance, car beauty, car testing, auto finance, etc., expand the company's profit space. Considering that Q1 is still repeatedly affected by the epidemic in the first half of the year, the income forecast for 23-25 is lowered from 1.5271,891 million yuan to 11.1 billion yuan, and the 23-25 net return forecast is reduced from 2.35 pound 386 million to 185.38 million million. Corresponding to the adjustment for 23-25, the EPS forecast 0.33 pound 0.54 yuan to 0.26 pound 0.33 pound 0.40 yuan. On August 17, 2023, the closing price of RMB7.39 corresponds to the PE of 29Universe 22Universe 18X, maintaining the "buy" rating.

Risk hint

The risk of poor development of new business, the risk of impairment of goodwill, the risk of equity pledge of major shareholders, and systemic risk.