Core views:
The company's 23Q1 revenue grew steadily, and its performance reached a record high. According to the company's quarterly report, the company achieved revenue of 9.22 billion yuan in 23Q1, +13.8%/11.7% respectively; net profit returned to the parent after deduction was 78/660 million yuan respectively, +14.9%/+16.0% year-on-year, +35.9%/+83.2% month-on-month. 23Q1 performance reached a record high.
The gross margin was stable, and the net interest rate performance was impressive. 23Q1 The company's gross margin was 21.0%, compared with -0.4pct/+1.2pct respectively; the net interest rate was 9.4%, +0.6pct/+2.1pct, respectively, compared with the same period, and the net interest rate was 10.6%, respectively -1.1 pct /+1.6pct compared to the same month. Specifically, the sales/management/R&D/finance expense ratio was 2.7%/2.9%/4.6%/0.4%, respectively +0.0pct/-0.6pct/-0.6pct/-0.5pct/+0.0pct, the company Cost management and control capabilities have been improved.
Coal machine sector: The coal industry has maintained a good development trend, and it is proposed to spin-off the subsidiary Hengda Intelligent Control and go public.
In 23Q1, the company's coal machinery sector had operating revenue of 4.79 billion yuan, +20.7%/+8.3% respectively; Guimu's net profit was 760 million yuan, +24.4%/+18.1% over the same period last month. According to the company announcement, the company plans to spin-off Hengda Intelligent Control and go public independently, which will help the company further focus its business in various sectors.
Auto parts sector: The auto parts sector is accelerating the transformation of new energy sources, and performance release can be expected. In 23Q1, the company's auto parts sector had operating revenue of 4.42 billion yuan, +7.2%/+15.6% respectively; Guimu's net profit was 0.2 billion yuan, -70.6%/-90.3% over the same period last month. As the domestic commercial vehicle sector continues to recover and the new energy business continues to expand in 2023, the auto parts business is expected to perform well, and performance release can be expected.
Profit forecasts and investment suggestions: The company is an outstanding high-end manufacturing enterprise led by a management with a methodology and a focus on medium- to long-term development strategies after the governance structure has been further optimized. The growth of coal machines comes from intelligence and integration, and zero growth of steam comes from internationalization and new energy sources. We expect the company's EPS for 23-25 to be 1.78/2.20/2.65 yuan/share, maintaining the reasonable value of A-shares at 25.2 yuan/share. The corresponding 23-24 PE valuation was 14.3/11.6 times, respectively, maintaining the “buy” rating; considering exchange rate factors, the reasonable value of H shares was adjusted to HK$23.9 per share (based on the exchange rate of HK$1.14 = RMB 1). The corresponding PE valuation for 23-24 years was 11.9/9.6 times, maintaining the “buy” rating, respectively.
Risk warning: The prosperity of the coal machine industry has declined; improvements in the auto parts business have fallen short of expectations; raw material prices have fluctuated greatly.