According to the GF Securities Research Report, Yingpu Precision (01286) 2023H1's revenue was HK$2,405 billion, +9.7% year-on-year, +11.0% in local currency; the company achieved net profit of HK$303 million, +13.3% year-on-year; the company's comprehensive gross margin was 26.0%, -3.3pct; as of July 31, 2023, the company's on-hand order amount reached HK$4,046 billion, +11.4% year-on-year.
According to the bank, the expansion of the company's Mexican plant affects short-term profits, and the inflection point of large-scale industrial performance is approaching. Currently, the precision processing, sand casting, and melt casting plants of the Mexican factory have begun operation, and the aviation parts and surface treatment plants are expected to be put into operation in 24. It is expected that with the scale of the industry, the company's Mexican park revenue will be strong in the future. Furthermore, benefiting from the recovery of the overseas aviation industry, the aviation, energy and medical sector performance grew strongly. 22H1's revenue in the aviation/energy/medical, diversified chemical industries, and automotive sectors was +67.3%, +10.5%, and -3.1% year-on-year. Matching leading overseas customers, the global layout gradually entered a dividend period. 22H1's revenue in the American, European, and Chinese markets was +9%, +17.5%, and -2.8% year-on-year.
The bank estimates that the company's net profit for 23-25 will be HK$5.99, 732 and HK$917 million, respectively, and the EPS will be HK$0.32, 0.39, and 0.49 per share, respectively. The company was given a 23-year PE valuation of 12 times, corresponding to a reasonable value of HK$3.81 per share, and maintained a “buy” rating.