22Q2 net profit growth improved year-on-year, railway equipment, urban rail, new industries diversified development, buy rating 22H1 annual revenue of 81.297 billion yuan / year-15%, return to mother net profit of 3.131 billion yuan / year-22%.
Among them, 22Q2's single-quarter revenue is 50.65 billion yuan / year-on-year-6%, and the return net profit is 2.911 billion yuan / year-on-year + 10%, the year-on-year growth rate is better than Q1. We believe that although the short-term demand for railway equipment is under pressure, in the long run, the outlook of the National Railway on the railway and high-speed rail mileage scale in 2035 confirms that there is still a large demand for railway equipment in the next 15 years, and the urban rail subway business is expected to grow rapidly. the company's new industrial plate has multi-dimensional strength and far-reaching potential. Considering the impact of the epidemic on railway passenger transport, the forecast of railway equipment income for the year 22-24 is revised downwards. It is estimated that the net profit of return to the mother in the year 22-24 is 94x116,000,000 yuan, and the EPS is 0.33pm 0.36pm 0.40 yuan (0.392max 0.45), corresponding to PE 1514max 12x. The 22-year average PE of comparable companies is 23 times (Wind consensus forecast). Considering that the company's profit growth may be lower than that of comparable companies, we give the company a 22-year target PE 19x with a target price of 6.27 yuan (the previous price is 7.41 yuan).
22H1 railway equipment revenue and gross profit margin under pressure, new industry gross profit margin year-on-year increase by EMU bidding and delivery decline, 22H1 railway equipment revenue decline, short-term gross profit margin pressure (increase in raw material costs, EMU income share decline), urban rail business, new industry income and gross profit margin fluctuation is relatively small. The income of 22H1 railway equipment, new industry, urban rail and urban infrastructure was 19.9 billion yuan, 17.5 billion yuan and 24.7 billion yuan respectively, which was-34%,-4% and-3% respectively compared with the same period last year. The gross profit margin was 20.63%, 19.71% and 18.92% respectively, compared with the same period of last year-1.97pct,-0.62pct and 0.29pct.
22H1 overall gross profit margin year-on-year-0.9pct to 20.13%, expense rate year-on-year-0.34pct to 14.99%; year-on-year net profit margin-0.33pct to 3.85%.
The short-term demand for railway equipment is declining, the medium-and long-term demand is considerable, and the growth potential of urban rail business is far-reaching. As the impact of the epidemic on railway passenger transport is still continuing, the short-term demand for railway passenger transport equipment is restrained to a certain extent. We believe that: 1) the National Railway's "outline of Railway advance Planning for Traffic Powers in the New era" puts forward the following objectives:
In 2035, the mileage of railways in China will reach 200000 km, including 70,000 km of high-speed railways. Compared with 14.6 and 38000 km of railway and high-speed rail at the end of 2020, the scale of railway construction in the next 15 years has more space and considerable equipment demand. With the stock EMU gradually entering the advanced repair stage, the company is expected to form a "manufacturing + service" life cycle system, maintenance income is expected to become a new momentum. 2) with the rapid development of domestic urban rail transit construction, the company's urban rail revenue is expected to maintain sustained growth; benefiting from the synergistic effect of the merger of CNR and CNR, the profitability of urban rail business is expected to improve steadily and gradually become a new profit growth point.
Risk hint: railway fixed asset investment is not as expected, railway freight incremental action is not as expected, domestic railway equipment procurement and delivery is not as expected, overseas business expansion is not as expected, the intensification of overseas epidemic has led to a decline in overseas business revenue and newly signed orders, and overseas production capacity and supply chain have been affected.