Both production and sales increased, and cash flow improved

The company released its 2023 mid-year report. 23H1 achieved revenue of 7.72 billion yuan, same increase of 5.9%, net profit of 390 million yuan, same increase of 3.0%, EPS 0.19 yuan, same increase of 3.0%; 23Q2 revenue was 4.0 billion yuan, same increase of 11.7%, net profit of 210 million yuan, same increase of 5.0%. The company's order performance grew steadily, maintaining the company's holdings growth rating.

Key points to support ratings

Net revenue and profit have increased steadily, and cash flow has improved. 23H1 achieved revenue of 7.72 billion yuan, same increase of 5.9%, net profit of 390 million yuan, same increase of 3.0%, EPS of 0.19 yuan, same increase of 3.0%, same increase of 3.0%; 23Q2 revenue of 4.0 billion yuan, same increase of 11.7%, and net return profit of 210 million yuan, same increase of 5.0%. In terms of cash flow, 23H1's net operating cash was 66 million yuan, an increase of 116.7%, and 23Q2's net operating cash was 260 million yuan, an increase of 337.1%. Cash received from sales of goods and services increased, resulting in a sharp increase in net operating cash over the same period last year.

Gross profit margin and net interest rate improved month-on-month, and cost ratio improved month-on-month: 23H1 company's comprehensive gross profit margin was 14.2%, same increase 0.1 pct, net interest rate 5.1%, same decrease 0.1 pct; 23Q2 gross profit margin was 14.3%, same decrease 0.5 pct, increase 0.2 pct month on month, net interest rate 5.3%, same decrease 0.3 pct, ring increase 0.4 pct. 23H1's four-item expense rate was 8.9%, an increase of 0.4 pct; 23Q2's four-item fee rate was 8.2%, a decrease of 0.2 pct, a year-on-year decrease of 1.4 pct. 23Q2. In addition to the financial expense rate, the sales, management, and R&D expense rates all declined month-on-month.

Order production and sales both increased. 23H1 signed a total of 11.19 billion yuan of new contracts, an increase of 34.5%, and 23Q2 signed 5.69 billion yuan of new contracts, an increase of 47.3%. The company's order growth was strong, and future performance was guaranteed.

The sales volume of 23H1 steel structure products reached 576,000 tons, an increase of 13.0%, and the sales volume of 23Q2 steel structure products reached 324,000 tons, an increase of 11.7%.

As a large-scale industrial plant contractor, the company has business drainage capabilities such as BIPV and energy storage. As a contractor with a competitive advantage throughout the industry chain, the company not only grasps business traffic entrances, but also provides customers with construction solutions for new energy facilities. As module prices fall, the distributed photovoltaic business is expected to usher in the release of orders during the year, increasing the company's profits.

valuations

Considering steady growth in the company's main business and maintaining profit forecasts, it is estimated that the company's revenue for 2023-2025 will be 18.0 billion, 211.5 billion yuan, and 25.51 billion yuan, respectively, and net return profit of 8.4, 10.7 billion yuan, and 1.3 billion yuan respectively; EPS will be 0.42, 0.53, and 0.65 yuan respectively. Maintain the company's shareholding growth rating.

The main risks faced by ratings

Prices of raw materials fluctuated greatly, BIPV business expansion fell short of expectations, and the recovery in downstream demand fell short of expectations.