\u3000\u3000 Hangzhou Honghua Digital Technology Stock Company Ltd(688789) (688789)
Event: Hangzhou Honghua Digital Technology Stock Company Ltd(688789) released a performance express. It is expected to achieve a revenue of 944 million yuan in 2021, a year-on-year increase of + 31.88%; The net profit attributable to the shareholders of the listed company was 228 million yuan, a year-on-year increase of + 33.43%; The deducted non net profit attributable to shareholders of listed companies was 211 million yuan, a year-on-year increase of + 32.60%.
Short term factors affect the downstream, and the revenue end of Q4 is slightly lower than expected: the company achieved a revenue of 241 million yuan in 21q4, a year-on-year – 13.3%, and a net profit attributable to the parent company of 65.33 million yuan, a year-on-year + 0.4%. The revenue base of 20q4 is high, and affected by the power restriction policy from September to October, the operating rate of the downstream textile printing and dyeing industry is insufficient, which is a drag on the company’s performance in the fourth quarter. The company’s 21q4 net interest rate reached 27.1%, up 3.7 percentage points year-on-year and 3.9 percentage points month on month, and its profitability continued to improve.
The long-term trend of digital substitution of textile printing remains unchanged, and “equipment + ink” establishes a leading advantage: in the long run, the global penetration of textile digital printing will be further improved; As a large textile printing and dyeing country, China needs fast, economic and environmental friendly printing methods, and the penetration rate of digital printing still has a lot of room to improve. The company is a global leading enterprise in the field of textile digital printing, and the sales of equipment and ink complement each other; Software furniture has profound technical accumulation and rich product pedigree, which can meet different downstream needs. It is expected to continue to expand its advantages and improve its market share.
Revenue volume expansion and profit margin improvement: with the expansion of the company’s revenue volume, the scale effect and brand advantage are significant; The proportion of digital direct injection equipment and ink sales revenue increased, and the overall profit margin increased steadily. At the same time, through the layout of upstream and downstream industrial chains, the company explores the flexible fast reverse supply chain mode and promotes the transformation and upgrading of the textile industry. The company will also benefit from the development of the industry. The market space of digital printing is broad, and we are optimistic about the leading position and growth expectation of the company.
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 228 / 336 / 467 million respectively, and the corresponding PE of the current stock price is 69 / 47 / 34 times. The penetration rate of textile digital printing has a large room for improvement. The company’s equipment and ink are supplied in an integrated way, and the growth is driven by the increment and stock market; Stable business performance and stable leading position, maintaining the “overweight” rating.
Risk warning: textile printing digital substitution is less than expected risk; The risk of repeated impact of the epidemic on the downstream industrial chain; The risk of intensified market competition.
