On the evening of July 26, Huatie Emergency Semi-annual Report stated that the company achieved revenue of 1.442 billion yuan in the first half of the year, a year-on-year increase of 35.72%; net profit attributable to the parent company was 247 million yuan, a year-on-year increase of 26.99%.
However, after the announcement of the good news, the stock price of Huatie Emergency opened higher and moved lower on July 27, with a drop of 2.61 throughout the day. It fell to the limit shortly after the opening on July 28, and the trend was heavy shipments for two days. .
However, many securities firms such as Guoyuan Securities and Guosheng Securities insist on being bullish on the company and predict that the company's performance is expected to maintain a high rate of around 30% in the next three years.
Securities are bullish on the rapid growth of aerial work platforms
Huatie Emergency is mainly engaged in equipment leasing business, providing construction maintenance equipment, construction support equipment and construction machinery equipment leasing and supporting services. The main products include aerial work platforms, subway steel supports, civil steel supports, aluminum alloy formwork, integrated lifting operating platforms, underground repair and maintenance methods, etc.
From the perspective of downstream applications, Huatie's emergency products are mainly used in construction, municipal facilities construction, rail transit construction, cultural relic protection, water conservancy projects and other fields, and are highly relevant to the infrastructure and construction industries.
The 2021 annual report shows that Huatie’s main emergency business*** is divided into three parts: construction support equipment, aerial work platforms, and underground repair and maintenance, with revenue proportions of 47, 42, and 10 respectively.
Regarding the performance growth in the first half of the year, Huatie Emergency said: The high growth of the aerial work platform segment has driven the company's overall business growth. The increase in downstream demand and the improvement of the epidemic situation have stimulated the continued recovery of the occupancy rate of aerial work platforms. It is expected that the overall equipment rental rate in the second half of the year will be better than that in the first half of the year, and the overall prosperity should remain high.
The semi-annual report data shows that from January to June 2022, Huatie’s emergency aerial work platform rental service segment achieved operating revenue of 756 million yuan, a year-on-year increase of 9.916; construction support equipment achieved revenue of 589 million yuan, A slight increase of 1.52% year-on-year; the underground repair and maintenance segment achieved revenue of 96 million yuan, a year-on-year decrease of 5.83%.
In the first half of this year, benefiting from the continued stimulation of stabilizing growth policies, the company's aerial work platform business doubled. However, the company's original largest revenue business, construction support equipment, grew at only 1.52, causing many investors to worry that its future revenue will still be affected by the epidemic and the real estate industry.
Guoyuan Securities believes that from an industry perspective, aerial work platforms have the characteristics of high frequency of use and short single use cycle, and are more suitable for supply through leasing. In 2020, there were 268,000 aerial work platforms in my country, of which 220,000 were in the rental market, accounting for 82.09% of the rental market. Compared with mature foreign markets, my country's aerial work platform rental market is in a stage of rapid development.
From a quarterly perspective, Huatie’s emergency performance showed a slowing trend. In the second quarter of 2022, Huatie's emergency revenue growth rate was 23.22%, and its net profit increased by 17.79% year-on-year. The previous quarterly report showed that from January to March 2022, Huatie’s emergency operating income was 643 million yuan, a year-on-year increase of 55.29%, and its net profit was 107 million yuan, a year-on-year increase of 41.40%.
The semi-annual report also shows that due to the repeated impact of the domestic new crown epidemic, the average occupancy rate of Huatie Emergency in the first half of the year was 75.28, a year-on-year decrease of 6 percentage points. However, Huatie Emergency also stated in its annual report that since April, the epidemic has gradually recovered, and the company's occupancy rate has rebounded to above 80 by the end of the reporting period.
After the release of the interim report, many securities firms expressed their optimism about the future development of Huatie Emergency. Industrial Securities believes that Huatie's emergency high-speed aircraft leasing business continues its rapid expansion trend, showing that the overall demand in the industry is good and the company's business development capabilities are excellent. As the manufacturing industry resumes work and production after the epidemic, engineering projects rush to completion, the demand for equipment rental continues to recover, and the company's high-end machine ownership continues to expand, the company's profits are expected to accelerate in the second half of the year.
The asset-light transformation continues
From the perspective of business model, Huatie’s emergency response mainly relies on financial leasing from equipment suppliers (Zoomlion, Xugong Machinery, Lin (Engineering and other enterprises) purchase construction equipment and then sublease it to others. Downstream customers mainly include China Railway, China Railway Construction, China Construction, Sinopec and other customers.
Since entering the field of aerial work platform rental services, Huatie’s main emergency business has achieved rapid growth. From 2018 to 2021, Huatie's emergency operating income was 888 million yuan, 1.154 billion yuan, 1.524 billion yuan and 2.607 billion yuan respectively, with a compound growth rate of as high as 43.
However, as the revenue scale grows, the balance of Huatie’s emergency accounts receivable is also rising. The semi-annual report shows that as of the end of June 2022, the balance of Huatie's emergency accounts receivable was 2.383 billion yuan, an increase of 789 million yuan compared with the same period last year (1.594 billion yuan), an increase of 4.95%.
On the other hand, because Huatie’s emergency equipment procurement is mainly carried out through financial leasing, the company’s debt ratio continues to be high. As of the end of June 2022, the company's asset-liability ratio has reached as high as 68.18.
In this regard, Huatie Emergency has repeatedly raised funds through non-private issuance in the past two years. Data show that in August 2020, Huatie Emergency provided a fixed increase of 1.09 billion yuan to XCMG and Zoomlion, the upstream suppliers of aerial work platforms, of which 790 million yuan was invested in aerial work platform rental service capacity upgrade and expansion projects, and 300 million yuan was invested in the aerial work platform rental service capacity upgrade and expansion project. Used to repay bank loans of the company and its subsidiaries.
In April 2021, Huatie issued an emergency announcement stating that the company planned to raise no more than 600 million yuan through a non-public issuance of shares. The target of the issuance would be Zhejiang Huatie, a company controlled by Hu Danfeng, the company’s controlling shareholder and actual controller. Bumblebee Holdings Limited. After deducting the issuance expenses, all the net proceeds will be used to supplement the company's working capital.
In addition, Huatie Emergency Investment in the field of aerial work platform equipment is still increasing. On July 12, Huatie announced in an emergency that its subsidiary Zhejiang Hornet plans to invest an additional 1.2 billion yuan in purchasing aerial work platforms and other main equipment. The company will provide Zhejiang Hornet with a total of no more than RMB 1 billion. Guarantee amount.
If you want to know more real-time financial news, please follow us.