\u3000\u3000 Beijing Relpow Technology Co.Ltd(300593) (300593)
Event: Recently, the company issued the performance forecast and fixed increase announcement for 2021: it is expected to realize the net profit attributable to the parent company of 253 ~ 277 million yuan in 2021 (123 million yuan in the same period in 2020), yoy + 105% ~ 125%. The non net profit deducted was 251 ~ 276 million yuan, yoy + 133% ~ 156%. In a single quarter, the net profit attributable to the parent company in 2021q1 ~ Q4 was 51 million, 68 million, 75 million and 58 ~ 82 million respectively, with a year-on-year growth rate of 1187%, 180%, 88% and 37 ~ 93% respectively, and continued to grow month on month. The performance forecast is in line with market expectations.
The demand is strong, the products continue to be sold in large quantities, and the profitability continues to improve. 1) Under the boom of high downstream demand in special industries such as aviation, aerospace and shipbuilding, after the adjustment of product structure in 2020, the company’s revenue and profit increased significantly in 2021. Q1 ~ Q3 companies achieved revenue of 283 million yuan, 622 million yuan and 1.008 billion yuan, with a year-on-year growth rate of 182%, 103% and 80%. The growth rate of profit side is higher; 2) During the period of improving management efficiency, the cost rate decreased. During the first three quarters of 2021, the expense rates of the company were 27.3%, 26% and 25.1% respectively, with a year-on-year decrease of 24.7ppt, 10ppt and 6.4ppt, with obvious improvement; 3) Under the joint effect of the increasing proportion of special power supply and the continuous improvement of management, the company’s net profit margin has been increasing. In the first three quarters of 2021, the company’s net profit margin was 17.7%, 20% and 20.44% respectively, with a year-on-year increase of 19.7ppt, 10.4ppt and 6.4ppt respectively. With the increase in the proportion of high value-added special power supply of the company, the profit margin is expected to be further improved.
It is proposed to increase production capacity by no more than 1.58 billion yuan to further open up long-term growth space. The company plans to invest 949 million yuan, 167 million yuan, 113 million yuan and 197 million yuan respectively in the four projects of “expansion of special power supply, industrialization of high reliability SIP power micro system products, expansion of 5g communication and service power supply and construction of R & D center”, and supplement working capital. The cumulative investment is 1.896 billion yuan, of which 1.58 billion yuan is raised. 1) The production expansion of special power supply is located in the headquarters of Beijing and is expected to be completed and put into operation in 2024. At present, many of the company’s core product production lines are close to full capacity, and the fixed increase will effectively solve the company’s capacity bottleneck in the field of special power supply. The company expects that after the completion of the project, the average annual income will increase by 850 million yuan and the average annual profit will increase by 197 million yuan. 2) The industrialization project of high reliability SIP power microsystem products has large domestic substitution space in the fields of aviation, aerospace and high-end industrial control. According to yole data, the global market scale will reach 18.8 billion US dollars in 2025. 3) 5g communication and server power supply expansion project is located in Shenzhen. The project improves the degree of manufacturing automation and intelligence, expands the company’s production capacity, breaks through the company’s capacity bottleneck and meets the growing demand of the downstream market by adding leased workshops and introducing advanced production equipment.
Investment suggestion: we expect the net profit attributable to the parent company from 2021 to 2023 to be 262 million yuan, 421 million yuan and 643 million yuan respectively. The current share price corresponds to 47x / 29x / 19x PE from 2021 to 2023, which are 0.42, 0.48 and 0.36 respectively from the perspective of PEG. The valuation is very attractive. Combined with the historical valuation center and taking into account the company’s growth and competitive advantages, 40 times PE is given in 2022, with a target price of 63.26 yuan. The target price corresponds to 40 and 26 times of PE and 0.66 and 0.49 times of PEG from 2022 to 2023. For the first coverage, give a “recommended” rating.
Risk warning: the growth rate of downstream demand slows down; The tension of upstream supply chain affects production; Intensified industry competition, etc
