Event: in 2023, the company H1 achieved operating income of 892 million yuan, year-on-year + 28.48%, net profit of 34 million yuan, year-on-year-36.77%; of which 2023Q2 realized operating income of 482 million yuan, + 18.59% of the same period last year, and net profit of 17 million yuan,-55.68% of the same period.
The whole machine business mainly drives the growth of the company's income scale. The growth rate of the company's hose and accessories business is repaired, and the expanding OEM business is the main driver of the company's revenue growth. The company's Q2 revenue growth rate is slower than that of Q1, which we believe is mainly due to the high base of the whole machine business in the same period last year. On the other hand, the weak recovery of the industry this year also has an impact on the growth rate of the whole machine business.
The gross profit margin of the whole machine decreased compared with the same period last year, and overseas subsidiaries made operating losses. In 2023, H1 company's gross profit margin is 12.97%, year-on-year-2.97pct, net profit rate is 4.28%, year-on-year-3.74pct; of which 2023Q2 gross profit margin is 12.31%, year-on-year-3.99pct, net profit rate is 3.72%, year-on-year-5.63pct. From the point of view of molecular companies, 23H1 Chunguang overseas Company lost a lot of money. Malaysia CGH, Vietnam CGH and Vietnam suntone lost a total of 12 million yuan, while the three subsidiaries of 22H1 made a combined net profit of + 6 million yuan. We expect the decline in gross profit margin of the whole machine and the loss of overseas subsidiaries to reduce the company's profit compared with the same period last year.
In 2023, the rates of H1 sales, management, R & D and financial expenses of the company were 0.97%, 5.81%, 2.9% and-1.73%, respectively, compared with the same period last year. The quarterly sales, management, R & D and financial expense rates of 23Q2 were 0.53%, 6.03%, 2.76%,-2.63% and 0.17%, + 1.23%,-0.84% and + 1.17pct respectively. The increase in the rate of management expenses of the company is mainly due to the increase in staff and workers' salary and depreciation and amortization. The increase in the rate of financial expenses is mainly due to the increase in interest income. In addition, the company implements the equity incentive grant, and the corresponding share payment fee is 3.6 million yuan.
Investment suggestion: the growth rate of the company's whole machine business is good, and the proportion of revenue is significantly increased; the revenue profit of the hose and accessories business is repaired month-on-month, and the revenue and profit is gradually improved. At present, Shang Teng has completed the equity transfer, and the follow-up look forward to the improvement of the profit of the whole machine. According to the report of the company, we slightly increased the income of hoses and accessories, reduced the income and gross profit margin of the whole machine, and estimated the net profit of homing in 23-25 years to be 2.410 million yuan (the previous value is 1.8 pound 2.4 billion yuan), and the corresponding dynamic PE is 14.9x/10.3x/8.6x. Maintain the "overweight" rating.
Risk tips: raw material price fluctuation risk; market competition risk; alternative product risk; machine order is not as expected; exchange rate risk; OEM penetration is not as expected.