22H1's performance was basically in line with expectations, and its adjusted net profit decreased by 46.0% and 53.8% compared with the same period last year. The company issued an unaudited performance notice that the net profit of 22H1 was 13.2-1.55 billion yuan, a decrease of 46.0%-54.1% compared with the same period last year; the adjusted net profit was 13.8-1.61 billion yuan, with a decrease of 46.0%-53.8%.
The net profit of single Q2 decreased by 39.5%, 53.2%, and increased by 51.1%, 95.1%, respectively. After adjustment, the net profit of single Q2 decreased by 39.8%, and increased by 48.4%, 90.3%.
Q2 production and operation resumed, performance improved month-on-month, the industry incremental phase to increase long-term investment, consolidate long-term barriers. On the revenue side, affected by the epidemic prevention and control, domestic Q1 income declined, Q2 production and operation resumed, and month-on-month growth was maintained. Domestic income growth may be affected by the ban on flavored e-cigarettes in the short term. However, the logic of long-term smoke reduction has not changed, and it is optimistic that the permeability will continue to increase after the entry into force of the national standard. At the same time, under the background of license plate supervision and platform management, the company's product and technological advantages are highlighted, and its market share is enhanced. Gross profit margin, the company entered the overseas disposable cigarette market in 22 years, and the incremental business is expected to drag down part of the gross profit margin. However, with the volume of new Feelm air products + automatic transformation, the long-term profit margin may remain stable. On the cost side, the company has increased investment in basic research and development in the past 22 years, and increased investment in information systems, organizational processes and marketing system construction, and increased R & D, management and sales expenses.
The introduction of ceramic core one-time solution to seize the cigarette market, the company's overseas closed market share is expected to increase. As the company's largest customer British American Tobacco PLC's VUSE brand products have passed the PMTA audit (its main product Alto is under review, it is expected that the follow-up review is more certain), superimposed VUSE's main competitor JUUL applied for PMTA has been rejected, VUSE's share in the US market is expected to increase, and the company's binding head customers are expected to fully benefit. In addition, the company has newly entered the overseas disposable cigarette market and released the FEELM Max ceramic core disposable atomization solution, which is expected to seize the disposable e-cigarette market by virtue of excellent product performance, and 22H2 may contribute to larger revenue increment.
Investment suggestion
During the domestic transition period, the growth center of the industry has moved down, but the logic of smoke reduction has not changed, and it is optimistic that the growth rate will improve in the medium and long term. In the stage of incremental competition, the company adopts expansionary policies to increase R & D investment and strengthen consumers' product power based on harm reduction demands and consumer experience. Layout CBD, cosmetology, medical atomization, technical iteration space is large, and the R & D expenditure rate is in a reasonable range. It is optimistic that the market share of the new tobacco will increase in the medium and long term, and the multi-platform layout will create a second growth curve. It is estimated that the 2022-24 net profit of return to the mother is 36.8 trillion 44.5 / 5.51 billion yuan, corresponding to the PE of 28X/23X/18X, maintaining the "buy" rating.
Risk hint
The transformation of R & D investment results is not as expected, the acceptance of the new technology market is not as expected, and the competition is intensified.