Main points of investment
Event: the company releases its 2023 half-yearly report
1) 2023H1 performance: 2023H1 realized operating income of 1.194 billion yuan, down 28.15% from the same period last year; net profit belonging to shareholders of listed companies was 214 million yuan, down 9.42% from the same period last year; and net profit belonging to shareholders of listed companies after deducting non-recurring profits and losses was 210 million yuan, down 9.97% from the same period last year. The weighted average return on equity was 3.64%, a decrease of 14.71pct compared with the same period last year. 2023H1's results fell short of market expectations, mainly due to a decrease in the number of products delivered in the first half compared with the same period last year.
2) 2023Q2 performance: from a single-quarter perspective, 2023Q2 achieved operating income of 718 million yuan, a decrease of 10.93% over the same period last year and an increase of 50.52% compared with the same period last year; the net profit belonging to shareholders of listed companies was 149 million yuan, an increase of 47.29% over the same period last year, and the profitability of 2023Q2 increased by 132.81% compared with the same period last year.
2023H1 and 2023Q2 profit margins have increased simultaneously, and the company's profitability has been improved. 1) profit margin: 2023H1 gross profit margin is 30.12%, an increase of 5.86pct over the same period last year; net profit margin is 17.90%, an increase of 3.70pct over the same period last year. 2023Q2 gross profit margin is 32.22%, year-on-year growth of 6.39pct, month-on-month growth of 5.26pct; net profit of 20.79%, year-on-year growth of 8.19pct, month-on-month growth of 7.26pct. The company's profit margin has improved significantly, and its profitability has been improving continuously.
2) in terms of period expenses: the rate of expenses during 2023H1 is 9.87%, an increase of 1.59pct compared with the same period last year. Among them, the sales expense rate was 0.56%, an increase of 0.24pct over the same period last year; the management expense rate was 3.61%, an increase of 1.14pct over the same period last year; the R & D expense rate was 8.40%, an increase of 2.89pct over the same period last year; and the financial expense rate was-2.70%, a decrease of 2.68pct over the same period last year.
The completion of some advance receipts affects contract liabilities, and the decline in sales rebates affects operating cash flow. 1) on the asset-liability side: notes and accounts receivable of 2023H1 is 1.198 billion, an increase of 2.32% over the end of 2022. The contract liability of 2023H1 is 363 million yuan, which is 54.59% lower than that at the end of 2022. This is mainly due to the fact that some of the advance receipts have reached the settlement conditions and have been carried forward.
2) Cash flow side: the net cash flow generated by 2023H1's operating activities was-16 million, a decrease of 200.12% over the same period last year, mainly due to a decrease in sales rebates in the current period compared with the same period last year.
Investment advice and profit Forecast
The company's products are based on the market strategy of "type I equipment serving both domestic and foreign markets". The "pterodactyl" brand has market influence and enjoys a high reputation in the field of military and civilian use at home and abroad.
According to the company's reported performance and the rhythm of product delivery, we adjust the company's profit forecast. It is estimated that the company's net profit from 2023 to 2025 is 4.73,6.23 and 801 million yuan, an increase of 28%, 32% and 29% compared with the same period last year. The company maintains a "buy" rating, taking into account the company's product strength and market advantages in large-scale fixed-wing UAV systems.
Risk tips: 1) domestic military order demand is lower than expected; 2) arms trade export order is lower than expected.