Event: on August 28, Zhiyang Innovation released its 2023 semi-annual report. In the first half of 2023, the company achieved revenue of 376 million yuan, an increase of 20.18% over the same period last year, a net profit of 24 million yuan, an increase of 37.06%, and a non-net profit of 17 million yuan, an increase of 8.66% over the same period last year. In the second quarter alone, the company achieved revenue of 287 million yuan, an increase of 51.45% over the same period last year, a net profit of 28 million yuan, an increase of 1982.24% over the same period last year, and a non-net profit of 25 million yuan, an increase of 7662.91% over the same period last year.
Improve profitability and attach importance to research and development. 2023H1 achieved a gross profit margin of 34.58%, down 0.31pct from the same period last year, and achieved a net profit rate of 6.18%, which increased 0.68pct over the same period last year, and its profitability improved.
2023H1 company sales expense rate, management expense rate, R & D expense rate is 9.46%, 6.75%, 12.38%, respectively, year-on-year changes-0.61pct,-0.69pct, 0.69pct. The main reason for the increase in R & D expenditure rate is that the company continues to strengthen its R & D investment in new business areas while consolidating its technological competitive advantage in the electric power field.
With the rapid growth of power orders, the intelligent operation and maintenance space of transmission can be expected. The company is the leader in intelligent operation and maintenance of electric power, deeply ploughing the electric power industry and continuously consolidating its competitive position, superimposing the influence of the improvement of prosperity in the field of electric power subdivision, and the amount of orders signed by the company in the first half of the year increased by more than 60% compared with the same period last year. China actively promotes the construction of intelligent power grid, which is put forward in the 14th five-year Plan and the outline of long-term goals for 2035:
We will speed up the intelligent transformation of power grid infrastructure. In February 2021, the State Grid formally issued the "Technical Specification for Intelligent Monitoring Devices for Transmission Line channels", and the relevant standards were formally standardized by the pilot, which further promoted the market demand. At present, the penetration rate of intelligent transmission testing equipment in China is only about 20%, there is still a large stock space in the market, and the development of the company is expected.
New business continues to expand. 1) in the field of rail transit, based on the continuous optimization of the railway line safety environment management and control product system with cloud edge coordination ability of the company, the company continues to expand its business, and the project of "Line Patrol production Management system" of the National Railway Group participated by the company in the first half of the year, is in the pilot application stage, and the landing application of artificial intelligence technology in the railway industry is gradually promoted. 2) in the field of water conservancy, the company continued to expand new advantageous areas and actively create bright demonstration projects on the premise of continuously promoting business in Shandong Province in the first half of the year.
Actively use AI technology. The company takes "artificial intelligence + industry" as the strategic direction, promotes the in-depth application of artificial intelligence in power, water conservancy, rail transit and other specific scenes, has an artificial intelligence research team of nearly 100 people, actively carries out the research and application of AI technology, and takes the lead in realizing the landing application of artificial intelligence in the electric power field. The company has been deeply engaged in the field of intelligent operation and maintenance of electric power for many years, and has accumulated a lot of industry data and experience, and the emerging AI technology is expected to contribute to a new round of business growth.
Investment suggestion: the company's revenue from 2023 to 2025 is expected to be 8.74,11.74 and 1.574 billion yuan respectively, with year-on-year growth rates of 30.28%, 34.30% and 33.99% respectively, and the return net profit is 0.71 yuan, 0.96 yuan and 139 million yuan respectively, corresponding to 0.46,0.62 and 0.90 yuan EPS in 2023-2025.
Maintain a "buy" rating.
Risk hint: the risk that the investment in electric power is not as expected, the business development of water conservancy rail transit is not as expected, and the application of AI is not as expected.