\u3000\u3000 Wuxi Autowell Technology Co.Ltd(688516) (688516)
Key investment points
2022 equity incentive plan: reissue equity incentive within half a year, raise performance assessment objectives, and demonstrate the company’s confidence
1) issue the equity incentive plan for 2022: it is proposed to grant 950000 restricted shares, accounting for 0.96% of the total share capital, and the grant price is 110 yuan / share. 850 incentive objects (covering core executives, technicians, etc.), accounting for 39% of the total number of employees. The company has issued equity incentive twice in nearly half a year (the 2021 equity incentive plan (Draft) was released in September 2021 and granted in October 2021, covering 470 people at a grant price of 106 yuan / share). The incentive personnel cover a wide range and bind the core members of the company.
2) raise the unlocking conditions of incentive performance in 2022: Based on the deduction of non parent net profit in 2021 (excluding share based payment expenses), the growth from 2022 to 2024 shall not be less than 50% / 100% / 150% respectively. The corresponding net profit deducted from non parent company in 2022-2024 was RMB 430 / 630 / 810 million respectively, with a year-on-year increase of 34% / 46% / 30%. In the equity incentive plan of 2021, the net profit of guaranteed minimum deduction and non return to parent from 2022 to 2024 is RMB 380 / 530 / 640 million respectively. In this equity incentive plan, the net profit of non parent guaranteed deduction from 2022 to 2024 increased by 47 / 94 / 170 million yuan respectively, demonstrating the company’s confidence in future development.
Performance in 2021 exceeded expectations: 129% year-on-year growth, exceeding the upper limit of performance forecast; Orders continued to rise
1) performance in 2021: the revenue reached 2.05 billion yuan, with a year-on-year increase of 79%; The net profit attributable to the parent company was 355 million yuan, a year-on-year increase of 129%, exceeding the upper limit of the performance forecast (330-340 million yuan), the net interest rate reached 17.3% (year-on-year + 3.7pct), and the performance and profitability exceeded expectations; The net profit attributable to the parent company in a single quarter of Q4 was 130 million yuan (net interest rate reached 21%), with a year-on-year increase of 48% and a month on month increase of 49%.
2) orders on hand: by the end of the third quarter of 2021, the company’s orders on hand had reached 3.625 billion yuan (including tax), a year-on-year increase of 55%. Superimposed on the orders of Jingke, Chint, Yuze, beehive, Huasheng, Gcl System Integration Technology Co.Ltd(002506) and delixin semiconductor announced by Q4 company in 2021 (the total amount is expected to exceed 700 million yuan), the orders on hand are expected to exceed 4 billion yuan (2.4 billion yuan by the end of 2020).
3) new orders signed: in the first three quarters of 2021, the total number of new orders signed by the company reached 2.86 billion yuan (including tax), a year-on-year increase of 39%. Based on the statistics of newly signed orders announced by Q4 company in 2021, it is estimated that the newly signed orders of the company in 2021 will exceed 3.5 billion yuan (2.67 billion yuan in 2020), of which the orders of photovoltaic equipment account for more than 90%.
Short term: benefiting from multiple technological changes in the photovoltaic industry, the equipment iteration is accelerated (only 1.5-2 years). The company is the leader in 70% market share of series welding machine, which fully benefits. At the same time, the company’s layout of photovoltaic single crystal furnace and its value is 6 times that of series welding machine, opening up the space for performance growth.
Medium and long term: the company’s platform layout opens the second growth curve of performance. The company’s semiconductor bonding machine equipment is progressing smoothly, has received the first batch of orders, and is expected to relay the large-scale production of photovoltaic equipment in the next 2-3 years. Lithium battery equipment orders accelerated, covering core high-quality customers.
Investment suggestion: optimistic about the company’s performance in the field of photovoltaic, semiconductor and lithium battery equipment in the next five years
It is estimated that the net profit attributable to the parent company from 2021 to 2023 will reach RMB 330 / 470 / 610 million, with a year-on-year increase of 113% / 41% / 31%, corresponding to 59 / 42 / 32 times of PE. Maintain the “buy” rating.
Risk warning: the downstream expansion of photovoltaic production is less than expected; The development progress of semiconductor equipment is lower than expected.
