Description of the event
The company released its semi-annual report for 2023. In the first half of 2023, it achieved revenue of about 2.86 billion yuan, a year-on-year decrease of 1%, and achieved net profit of 180 million yuan over the previous year, an increase of 65% over the previous year, minus non-net profit of 170 million yuan, a year-on-year increase of 82%; of these, 2023Q2 achieved operating income of 1.43 billion yuan, a year-on-year decrease of 6%, net profit of 100 million yuan, an increase of 65% over the previous year, minus non-net profit of 0.9 billion yuan, a year-on-year increase of 61%.
Incident comments
Looking at the half-year perspective, 23H1's revenue declined slightly year on year; achieved a gross profit margin of 20.2%, up 6.2 pct year on year; the period cost rate was about 10.0%, up 1.4 pct year on year. Specifically, the company's sales expense ratio, management expense ratio, and R&D expense ratio increased 0.2 pct, 0.3 pct, and 1.7 pct year on year, respectively. Among them, the increase in the company's R&D expenses rate is expected to be due to an increase in direct R&D material investment; the financial expense ratio decreased by 0.7 pct. At the same time, the impairment of the company's assets resulted in losses of about $07 billion and accrued credit impairment of $36 million. In the end, the company achieved a net interest rate of 6.5%, an increase of 2.6 pct over the previous year.
Among them, looking at the 23H1 split business, 1) wind power spindle: 23H1 company shipped 2,900 units, achieving revenue of about 660 million yuan, up 58% year on year, gross profit margin 24%, down 0.6 pct year on year; 2) casting: 23H1 achieved revenue of about 540 million yuan, a year-on-year increase of 64%, gross profit margin of 21%, an increase of 12.7 pct; 3) Wind power equipment modularization: 23H1 achieved revenue of about 140 million yuan, a year-on-year decrease of 68%, a year-on-year increase of 5.4 pct; other forgings 4): 23H1 achieved revenue of about 590 million yuan, a year-on-year increase of 6%, a gross profit margin of 29%, a year-on-year increase of 5.1 pct; 5) Structural parts and complete equipment: 23H1 achieved revenue of about 200 million yuan, a year-on-year decrease of 1%, and a gross profit margin of 12%, a slight year-on-year decrease; 6) Powder metallurgy: 23H1 achieved revenue of about 240 million yuan, a year-on-year increase of 25%, and a gross profit margin of 13%, an increase of 1 pct.
Looking at the quarterly level, 23Q2's revenue declined slightly year on year, with gross margin of about 21.3%, up 7.3 pct year on year; period expense ratio was 10.0%, up 2.2 pct year on year. Among them, sales expense ratio, management expense ratio, and R&D expense ratio increased 0.3 pct, 0.5 pct, and 2.2 pct year on year, and financial expense ratio decreased by 0.7 pct year on year. In the end, Q2 achieved a net interest rate of 6.8%, an increase of 3.0 pct over the previous year.
According to other financial indicators, the net operating cash flow inflows of 2023H1 and 2023Q2 companies were 60 million yuan and 0.2 billion yuan respectively, and the operating conditions were good; capital expenses were 270 million yuan and 170 million yuan respectively, indicating that the company is actively promoting production capacity construction.
By the end of June 2023, the company had orders of about 1,559 million yuan and was continuously procuring new orders on a rolling basis. We believe that with the gradual release of wind power project starts in the second half of the year and the continuous decline in raw material prices since Q2, the company is expected to achieve further growth in shipments and profits. At the same time, the company gave full play to the advantages of a comprehensive manufacturing platform and actively developed non-wind power products such as pipe molds and other castings and forgings, and is expected to form strong performance support in the future. Net profit attributable to 2023 is estimated to be 470 million yuan, corresponding to about 21 times PE. Maintain a “buy” rating.
Risk warning
1. The installed capacity of the wind power industry fell short of expectations;
2. The risk that the competitive pattern of the industry will worsen.