\u3000\u3000 Henan Huanghe Whirlwind Co.Ltd(600172) (600172)
In the fourth quarter, the non deduction performance exceeded expectations, and the profit was accelerated. The company released the performance forecast for the whole year of 2021. It is expected to realize the deduction of non net profit of 106 million yuan and the net profit attributable to the parent company of 41 million yuan, which will turn loss into profit compared with 2020. The company lost the lawsuit in the contract dispute case with Shanghai Guotai Junan Securities Co.Ltd(601211) Asset Management Co., Ltd., bearing a loss of 64 million yuan, resulting in large non recurring losses. In the single quarter of 2021q4, the company achieved 64 million yuan of non net profit deduction, while in the single quarter of 2021q1 / Q2 / Q3, the non net profit deduction was 09 / 14 / 19 million yuan respectively. The release of profits in the fourth quarter was significantly accelerated, mainly due to the growth of production capacity in the fourth quarter and the improvement of structure with the increase of the proportion of cultivated diamond sales under the operating characteristics of relatively rigid costs and expenses of the company, which promoted the increase of product volume and price.
Cultivating the diamond industry is still hot, and the company takes many measures to ensure high-quality development in the future. Industry: according to GJEPC, India's imports of cultivated diamond blanks in December were + 105% year-on-year and + 55% month on month; The export volume of bare drilling was + 65% year-on-year and + 20% month on month, maintaining a high boom. The official website of xiaobaiguang, a Chinese diamond head brand, shows that the company has accelerated the opening of stores recently, and has opened nine stores in Shanghai, Shenzhen, Beijing, Hangzhou, Nanjing, Chengdu, Wenzhou and Suzhou. The brand founder expects that the number of stores will reach 40 by the end of 2022. At that time, the primary stage of Chinese diamond consumer education will be completed, which is expected to stimulate the layout of more jewelers, The Chinese market is expected to penetrate rapidly, bringing greater demand for store distribution. Company: according to Henan Huanghe Whirlwind Co.Ltd(600172) official account No. 1: in 2021, the new supercharger of the company reached a record high (300 units +). ② The 110kV substation has been put into operation to ensure the stable power supply in the production of superhard materials; ③ On January 4, 2022, the company and China United Network Communications Limited(600050) jointly invested 500 million in the "5g + smart factory" project, which officially started, promoting the company's intelligent manufacturing into a new chapter.
Profits are expected to release rapidly after revenue crosses the level of breakeven point. At present, due to the high rigid cost, the company's income is still near the breakeven point, and the profit is sensitive to the fluctuation of income. Since 2021, the company has increased the purchase of press through its own funds and cooperation with the government, with a significant increase in production capacity. At the same time, with the rise in the price of superhard material products, the revenue is expected to start to grow rapidly in the fourth quarter. As of the first half of 2021, indicators with less operating or financial leverage, such as operating net cash flow, EBIT and EBITDA, have improved significantly, which further confirms the positive trend of the company's performance. Once the company crosses the income level at the breakeven point, the profit is expected to release rapidly.
Investment suggestion: it is estimated that the operating revenue of the company from 2021 to 2023 will be 2.56 billion / 3.11 billion / 3.89 billion respectively, with a growth rate of 4.5% / 21.3% / 25.2% respectively; The net profit attributable to the parent company is 41 million yuan / 538 million yuan / 778 million yuan respectively, and the growth rate from 2022 to 2023 is 1212% / 45% respectively (the loss will be reversed in 2021, and the growth rate will be omitted). With reference to the valuation of comparable companies in the industry and in combination with the company's leading position in the number and technical level of presses, 50 times PE is given in 2022, with a target price of 18.6 yuan, "Buy-A rating".
Risk tip: the acceptance of diamond cultivation is lower than expected; Deterioration of industry supply; Overseas outbreaks affect midstream processing; The production of the company is less than expected; The assumptions in this paper are less than expected.
