General situation of events
Mingzhi Science and Technology released its semi-annual report on August 17, 2023: the operating income in the first half of 2023 was 232 million yuan, down 17.50% from the same period last year; the net profit was 9.4001 million yuan, an increase of 48.54% over the same period last year; the gross profit margin was 29.66%, and the net profit rate was 4.04%. In the second quarter of 2023, the operating income was 124 million yuan, an increase of 2.61% over the same period last year; the net profit was-641400 yuan, an increase of 92.71% over the same period last year, with a month-on-month decline; the gross profit margin was 27.42%, and the net profit rate was-0.52%.
Affected by equipment acceptance and casting sales, the company's performance was under pressure in the first half of 2023. In the first half of 2023, the company realized operating income of 232.4786 million yuan, down 17.50% from the same period last year, of which equipment sales reached 33.1366 million yuan, down 50.4% from the same period last year. The sales of castings reached 187.5478 million yuan, down 8.24% from the same period last year. Due to the influence of the international situation and macroeconomic environment, the delivery of equipment projects has been delayed, resulting in a decline in revenue. In mid-2022, the company's inventory was 234 million yuan and contract liabilities were 101 million yuan, an increase of 8.30% and 36.51% respectively over the end of the year, providing a solid foundation for subsequent growth.
The company specializes in the field of sand casting. In the field of high-end casting equipment business: the company takes the fully automatic cold core box and non-mechanism core machine with independent intellectual property rights as the core equipment, through system integration, it can provide a green intelligent precision core casting production line composed of production units such as core making, core assembly, pouring and casting post-processing, and can also provide customers with the overall planning, design, construction and delivery services of the intelligent foundry workshop. In the field of high quality aluminum alloy casting business: the company provides high quality aluminum alloy castings with precision and complex cavities such as commercial vehicle gearbox housing, new energy vehicle inverter and drive motor shell, condensing gas boiler heat exchanger, rail transit braking system valve body pump, etc., for customers in automotive, thermal energy HVAC engineering, rail transit and other fields. And for customers' new product research and development to provide aluminum alloy casting synchronous engineering development, trial production, casting process improvement and other value-added extension services.
The actual controller subscribes and increases in full to develop large aluminum castings.
In May 2023, the company issued the "preliminary Plan for issuing A shares to specific targets in 2023". The total amount of funds to be raised will not exceed 400 million yuan. Wu Qinfang and Qiu Gu, the company's controlling shareholders and joint actual controllers, will subscribe in cash. Raise funds for large aluminum castings green intelligent production line construction project, to build large aluminum alloy casting precision core molding production line and workshop in the company's existing plant, for the production of large aluminum alloy castings. At present, the size of the company's main casting products is less than 1m or the weight is less than 60KG. After the completion of the large aluminum casting precision production line, the company will have the batch production capacity of large aluminum castings with a size of more than 1m or a weight of more than 100KG, and the business will expand to photovoltaic, new energy vehicles and other new business areas, opening up new growth space. Large aluminum castings are widely used in photovoltaic equipment, new energy vehicles, aerospace equipment, high-voltage power transmission and transformation equipment, medical equipment, high-speed rail equipment and other fields. Compared with the traditional resin sand or wax loss casting process, it can obviously reduce cost and increase efficiency.
Equity incentive strengthens confidence and attaches importance to R & D investment
In May 2023, the company issued the 2023 restricted Stock incentive Plan, which is intended to grant 1.4013 million shares to 220. the assessment goal of the equity incentive with a price of 16.50 yuan and a 100% ownership ratio is that the net profit of the company will not be less than 1.25 trillion yuan in 2025, or the growth rate of R & D expenditure will not be less than 15%, 25% and 35% on the basis of 2022.
Investment suggestion
Affected by the macro environment and the pace of acceptance, we predict that the company's operating income from 2023 to 2025 will be 771 million RMB 9.18pm (the previous value is 824pm 10.64 pm), the net profit from its mother will be 1.18pm 1.65pm (the previous value is 1.27max 176pm), and the diluted EPS based on the current total share capital of 124 million shares will be 0.96 / 1.33max 1.64 yuan. The PE multiple of the company's current stock price forecast for EPS from 2023 to 2025 is 23-17-14. The company benefits from the advanced nature of high-end sand casting equipment, continues to expand the downstream scene of castings, leading to high growth and maintaining a "buy" rating.
Risk hint
1) Market competition aggravates the risk. 2) the innovation risk brought by technology iteration. 3) the risk of vacuum cavity expansion of heterojunction PECVD aluminum alloy is not as expected. 4) calculate the error risk of the market space. 5) the information on which the research is based is not updated in time and fails to fully reflect the risk of the latest situation of the company.