The company's revenue in the first quarter of 2023 was 4.54 billion yuan (year-on-year + 14.7%), and the return-to-home net profit / non-return-to-home net profit was 230 million / 200 million yuan respectively (year-on-year + 39.4% soybean 21.8%). In the new situation of the new ladder market, the company accelerates intelligence, devotes itself to high-quality development and focuses on two-wheel drive of products and services. In the medium and long term, the company takes the transformation of old ladders and the installation of old houses as a breakthrough to create new service growth points. We are optimistic about the company's long-term development prospects and maintain its "buy" rating.
Financial Overview: in the first quarter of 2023, the company achieved revenue of 4.54 billion yuan (year-on-year + 14.7%), and net profit / non-return net profit of 230 million / 200 million yuan respectively (year-on-year + 39.4% max 21.8%). In 2022, the company achieved revenue of 23.57 billion yuan (- 4.6% compared with the same period last year) and net profit of 980 million yuan (+ 21.0%).
In the first half of 2022, COVID-19 's epidemic caused a great disturbance to the company's operation. The company's 22Q1 and 22Q2 revenue fell by 15.0% and 26.8% respectively in a single quarter compared with the same period last year, and the company quickly returned to normal operation, achieving 8.01 billion yuan in revenue in a single quarter (+ 17.9% in a single quarter compared with the same period last year, a record high in revenue in a single quarter). Under the strategic inflection point of "from ascending to descending" in the real estate and new elevator industry, the company has shown a certain degree of operational resilience, and the transformation from elevator manufacturing to elevator modern service industry has been very effective.
The new ladder accelerates intelligent research and development to maintain core competitiveness. After more than 30 years of entrepreneurship and development, the company has made and sold more than 1.2 million elevators. In order to meet the growing demand for intelligent products in the market, the company has gradually shifted its research and development focus to intelligent products, and has launched intelligent products such as SmartEYE monitoring system, SmartK- II intelligent escalator and LEHY-Pro elevator. In 2022, Lingyun series traction-driven passenger elevators passed the Shanghai brand certification and became the first and exclusive elevator product of the Shanghai brand so far, and successfully realized the factory delivery of LEHY-Pro flagship products and the first commodity project of 10m / s LEHY-H elevator signed with customers.
Continue to expand the development of service industrialization and create new service growth points. The company takes the renovation of old ladders and the installation of old houses as a breakthrough. In 2022, the revenue of service industries such as installation, renovation and maintenance reached 8 billion yuan for the first time in history. The gross profit margin of the service business has exceeded that of the manufacturing business in the past two years, and the share of service revenue and profit growth have continued to accelerate.
Risk factors: the decline in real estate sales is a drag on the main elevator business; the price of raw materials has risen sharply; the renovation of old ladders and the retrofitting of elevators in old houses are not as expected; the risk of large credit impairment caused by the operational risks of customers downstream of the company; the company's new products and R & D projects are not as expected.
Investment suggestion: domestic elevator demand is expected to grow steadily, the company has a large number of elevators in use, and outstanding maintenance services, "products + services" is expected to support the company's long-term development. Considering that the operation of the company is greatly affected by the epidemic disturbance in 2022, the lower reaches of domestic real estate is still in a period of transition, which may suppress the sales of new ladders to a certain extent. We adjust the company's 2023 and 2024 performance forecasts to 1.23 billion yuan and 1.31 billion yuan (1.4 billion yuan and 1.5 billion yuan), adding 1.4 billion yuan to the 2025 performance forecast. We take Conley Elevator, which is also engaged in elevator business, as a comparable company. Conley Elevator 2023 Wind unanimously expects the PE valuation to be 20 times. The company has outstanding market service capacity, a high proportion of service revenue and a sound business model. We give the company 20 times PE valuation in 2023, corresponding to the target price of 24 yuan. We are optimistic about the company's long-term development prospects and maintain its "buy" rating.