on September 5, 2023, central control technology (688777) announced that the company will accept institutional research on September 1, 2023, guangfa Securities, Jiahe Fund, Cathay Pacific Fund, Minsheng Bank Fund, Nord Fund, Guohua Xingyi Insurance, Rongtong Fund, Jingshun Great Wall Fund, Xinyuan Fund, TT International, China Investment UBS, Caitong Asset Management, Boshi Fund, Guorong Self-operated, CITIC Asset Management, Huachuang Self-operated, Chang'an Fund, Bank of China Fund participated.

The details are as follows:

Q: In the first half of 2023, the company's management, sales and other expense rates showed a downward trend again. What measures did the company take to improve operating efficiency?

A: in the first half of 2023, the company's period expense rate was 20.47, down 7.12 percentage points from the same period last year, of which the management expense rate was 5.60, down 1.19 percentage points from the same period last year, and the sales expense rate was 9.31, down 1.16 percentage points from the same period last year.

in the first half of 2023, the company continued to promote process reform projects such as market LTC, research and development IPD, supply chain ISC, financial IFS, etc., continuously deepened its operation and management capabilities, fully implemented and promoted the "iron triangle" formation collaborative marketing mode, accurately and deeply served the differentiated needs of users, continuously developed the middle and high-end markets, and realized in-depth strategic cooperation with major customers and grid-based full coverage management of large projects, promoted the continuous optimization of the company's management expense rate and sales expense rate during the reporting period.

In the future, the company will continue to improve operational efficiency, optimize organizational management, and support the long-term adaptation and development of the company's organization and business with a change management model.

Q: What is the main reason for the decline in the company's gross profit margin in the first half of 2023?

A: In the first half of 2023, the company's overall gross profit margin fell by 4.23, and the gross profit margin of independent products (except S2B) was 37.86, down 2.74 percent year-on-year and 1.61 percent from 2022. The largest segment of revenue in independent products, "Industrial Automation and Intelligent Manufacturing Solutions", had revenue of 1.959 billion yuan, with a gross margin of 41.28 percent, up slightly from a year earlier and 1.64 percent from the full year of 2022. The gross profit margin of industrial software in independent products has declined. The main reason is that during the construction of a large number of intelligent factories in the early stage, the company concentrated on building a number of benchmark projects with strategic significance, which had a certain degree of impact on the gross profit margin of industrial software projects in the short term. In addition, industrial software projects contain a certain proportion of external hardware products. In the future, with the continuous introduction and application of the company's industrial software products, the proportion will continue to increase, the proportion of external hardware products will gradually decline.

The follow-up company will carry out more detailed dismantling and upgrading plans and assessment targets in terms of orders, revenue, gross profit margin and net profit, and continue to optimize the company's own profitability. In the context of the increase in gross margin of industrial automation and intelligent manufacturing solutions and the optimization of the product structure of the industrial software business, the gross margin of the company's own products is expected to rise steadily in the future.

Q: In the first half of 2023, the company's overseas orders grew rapidly. What are the main developments?

A: In the first half of 2023, the company achieved a number of major breakthroughs in overseas markets, signing new overseas contracts of 0.304 billion billion yuan, an increase of 109.6 year-on-year.

With leading automation control systems, industrial software and overseas market solution technology and product quality, the company continues to increase its market layout and development in Southeast Asia, the Middle East, Africa, Eurasia and other overseas regions, in Singapore, Saudi Arabia, Japan, the Netherlands, India, Malaysia, Indonesia and other countries set up subsidiaries to continuously improve overseas localization operation capabilities and provide better services to overseas users.

With the continuous promotion of the company's overseas layout and the continuous enhancement of its influence, the company's cooperation with Saudi Aramco, Shell, BASF, ExxonMobil and other international high-end customers is deepening. In the first half of 2023, the company successfully won the bid for the digital project of Saudi Aramco Holdings, the world's largest single shipyard, Saudi International Maritime Industry Group, and successfully obtained orders for instruments such as pressure transmitters from Kuwait Oil Company, demonstrating the company's digitalization, The outstanding strength in the field of intelligence and independent instrumentation is a major breakthrough for the company in overseas markets.

The company is actively seeking cooperation with high-end products and technology suppliers in the global industry, and will continue to provide intelligent manufacturing solutions for global markets and users, and continue to expand its international ecosystem and global layout and operation capabilities.

Q: In the first half of this year, the company's foreign investment and mergers and acquisitions have achieved a lot. What are the main directions of the company's investment and mergers and acquisitions in the future?

answer: the company's investment and merger work will continue to focus on the three strategic themes of internationalization, digitalization and 5T, and with the purpose of "enhancing core technology, supplementing product system and enriching marketing channels", the company will steadily promote the landing of investment work through direct investment, joint venture, merger and acquisition and other series of means, promote the formation of value chain synergy, and provide customers with high value-added solutions covering the whole life cycle, promote the internationalization and digitalization of the company.

In the future, the company will continue to explore new business growth points, comply with the country's technological development trends, and select strategic emerging industries such as artificial intelligence, energy storage, and green environmental protection that are compatible with the company's strategic goals and can be compatible with the company's business. High potential markets that form synergies. Continue to adhere to the technology, products, market, industrial chain and other aspects of the systematic research, design, verification, transformation of emerging business opportunities, and finally form a new product and new business model design plan, continue to create a new business growth point for the company's future development.

Q: In the context of international business expansion, how can the company replicate its domestic business development experience and continue to remain competitive

a: in recent years, the company has continued to realize the rapid expansion of international business from top-level management and overall operation, pushed the "135 customer value innovation model" to overseas markets, established the first overseas 5S store in Saudi Arabia, and pushed the PLNTMTE "industrial partner" with the company's characteristics-5S store + S2B platform to overseas in an all-round way; Create and optimize the overall solution of central control intelligent manufacturing, combined with the "open and intelligent" concept of OMC system, with comprehensive, accurate and flexible production management and enterprise operation based on "factory operating system + industrial PP" big data, it helps global customers to carry out digital transformation and intelligent upgrading, and creates incremental value for all walks of life. In addition, through the establishment of international production and manufacturing centers, engineering centers and training centers, the company accelerates the cultivation and improvement of international operation capabilities and levels in high-end service industries such as engineering design and consulting, and enhances the company's position in the global value chain, industrial chain and international competitiveness.

In addition, the company will continue to firmly follow the national "One Belt One Road" policy, consolidate existing cooperation results with Chinese companies going global, stabilize the basic market in advantageous regions and industries, and further expand new areas of cooperation and cultivate common development. New growth points; further enhance the brand awareness of CCC overseas, strengthen cooperation with high-end international group customers, and actively expand the construction of channels in overseas regions, in order to create an international business ecosystem, enabling overseas users, process package manufacturers, design institutes and partners.

Q: New energy-related businesses grew rapidly in the first half of the year. What is the subsequent growth expectation?

A: In the first half of 2023, the company achieved remarkable results in market expansion in the field of new energy. Among them, the revenue of the battery industry increased by 484.27 year-on-year, and the revenue of the metallurgical industry increased by 154.71 year-on-year. In the second half of 2023, based on the "P + B" intelligent enterprise architecture and supported by the "135 customer value innovation model", the company will seize the golden period of the development of digital economy and advanced manufacturing industry, adhere to the active and in-depth layout of new energy, new materials and other emerging fields, give further play to the advantages of the company's industrial software solutions and Xinchuang solutions, and constantly open up the new needs of new and old customers. In addition, the company has continued to expand its market influence in the new energy field through in-depth cooperation with customers such as Huayou Cobalt and Qingshan Holdings in the field of lithium battery materials.

the main business of central control technology (688777) is to build a "135 customer value innovation model" for industrial 3.0 + industrial 4.0, and to build a new one-stop industrial service model of "5S store + S2B platform, focus on building a new generation of whole-process intelligent operation management and control system (OMC)," factory operating system + industrial APP "technical architecture and process industry process simulation and design platform (APEX) three major product technology platforms as the core of intelligent manufacturing product/solution system, focusing on the layout of 5T technology (automation technology AT, information technology IT, process technology PT, operation technology OT and equipment technology ET), it is committed to solving problems that cannot be solved by single technology in the industrial field through 5T integration and innovation, supporting major industry needs in the transformation and upgrading of process industry, opening up the whole life cycle business chain of engineering design, engineering construction, operation management and operation and maintenance services, and building three core technology engines of" data base, algorithm base and model base.

central control technology 2023 report showed that the company's main revenue was 3.641 billion yuan, up 36.54 percent from the same period last year. Net profit attributable to the parent was 0.511 billion yuan, up 62.88 percent from the same period last year. Deduction of non-net profit was 0.424 billion yuan, up 77.71 percent from the same period last year. Among them, in the second quarter of 2023, the company's single-quarter main revenue was 2.195 billion yuan, up 30.27 percent from the same period last year; non-net profit deducted in a single quarter was 0.357 billion yuan, up 79.21 year on year. Debt ratio 45.19, investment income 78.4402 million yuan, financial expenses -0.204 billion yuan, gross profit margin 32.48.

the stock has been rated by 26 institutions in the last 90 days, with 23 buying ratings and 3 overweight ratings; the average institutional target price in the past 90 days is 73.18.

The following is detailed earnings forecast information:

The margin trading data shows that the net inflow of financing of the stock in the past three months has 0.177 billion, and the financing balance has increased; the net outflow of securities has 1.174 billion, and the margin trading balance has decreased.

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