\u3000\u3000 Zhejiang Supcon Technology Co.Ltd(688777) (688777)
Event: on February 24, 2022, the company issued two announcements: the 2021 performance express and the shareholding in PCCW. In 2021, the company achieved a total revenue of 4.519 billion yuan, a year-on-year increase of 43.08%; The net profit attributable to the parent company was 578 million yuan, a year-on-year increase of 36.54%; The net profit deducted from non parent company was 452 million yuan, with a year-on-year increase of 39.10%. In addition, the company plans to acquire 22% equity of Sinopec Yingke with cash of 561 million yuan.
Comments:
The performance is slightly higher than expected, and the process intelligent manufacturing has great prospects
According to the announcement data of the company's 2021 annual performance express, the compound growth rate of the company's operating revenue from 2016 to 2021 reached 27.41%, and the compound growth rate of net profit attributable to the parent company was 37.23%. The overall performance maintained a high growth rate.
The company's performance maintained steady growth. On the one hand, it benefited from the continuous deepening of China's intelligent manufacturing trend and the further upgrading of digital transformation in the field of process industry. The demand of customers in downstream industries for high-end automation, digitization and intelligence continued to rise, and the process intelligent manufacturing track continued to maintain a high profile; On the other hand, thanks to the company's active promotion of its own hard scientific and technological strength and improvement of industrial layout, its advantages in automation, digitization, intelligent technology and products in the industrial field have been further improved. Under the dual logic of strong downstream demand and continuous improvement of the company's products, the company is expected to maintain a high growth level and broad development space in the future.
Sinopec Yingke has deep cultivation in intelligent manufacturing track and has rich experience in energy and chemical industry
According to the announcement of the company, the company plans to acquire 22% equity of petrochemical Yingke with its own capital of 561 million yuan. In the first three quarters of 2021, the net assets of petrochemical Yingke were 1.932 billion yuan, the operating revenue was 1.435 billion yuan and the net profit was 156 million yuan. Compared with the listed companies such as standard Dhc Software Co.Ltd(002065) , Shanghai Baosight Software Co.Ltd(600845) , Beijing Thunisoft Co.Ltd(300271) , the valuation of petrochemical Yingke is within a reasonable range. The major shareholder of Sinopec Yingke is Sinopec, which holds 55% of the equity of Sinopec Yingke. Sinopec Yingke has been deeply engaged in the intelligent manufacturing track for many years and has been committed to providing intelligent manufacturing products and solutions with automatic control system as the core and covering industrial software, automatic instruments and operation and maintenance services for industrial enterprises dominated by process industry, It has rich experience in energy and chemical industry, 4 hardware products, 33 platform products and 107 software products, and has strong profitability. Generally speaking, its fundamentals are excellent.
Participating in PCCW will help the company further consolidate its leading position in the industry and improve its long-term strategic layout
We believe that the company's participation in PCCW is conducive to the long-term development of the company and has positive significance in three aspects: actively integrating resources and consolidating the leading position in the industry: as one of the excellent domestic industrial software enterprises, PCCW has a certain voice in the intelligent manufacturing track of Petrochina Company Limited(601857) / chemical industry. The company's participation in PCCW will help
Consolidate the company's position in the market and further improve the industry's competitive power; Enrich the company's industrial software product matrix and improve the company's overall strategic layout: on the one hand, PCCW has many years of ERP implementation experience and involves CRM, SRM, HR, OA and other industrial software, which can quickly enrich the company's industrial software product matrix and improve the company's comprehensive strength from equipment, control system to industrial software; On the other hand, PCCW has a very deep cooperative relationship with the design institute and has accumulated a large number of process mechanism models and equipment models in the petrochemical field, which is expected to further improve the comprehensive performance of the company's products and enhance the company's product competitiveness;
Further binding downstream customers is conducive to the steady growth of the company: Sinopec, as the major shareholder of Sinopec Yingke, holds 55% equity of Sinopec Yingke. The company's participation in Sinopec Yingke this time will help the company further bind major customers in petrochemical, chemical and other fields. In the future, it is expected to increase the proportion of its products in downstream major customers and contribute to the long-term steady growth of the company.
Under the background of "double carbon", the market prospect of process industrial control is broad
In the long run, China's process industry has a large market space brought by the upgrading of industrial control products under the goal of "double carbon". China's process industry has two characteristics in terms of carbon emission: first, the average process level and equipment of China's process industry are backward, the degree of automation is low, and the energy consumption is still in the stage of extensive management. It is difficult to significantly control the energy consumption only by means of process optimization and energy-saving technology. It is necessary to update the automation equipment and upgrade the basic automation; Second, at present, the total energy consumption of China's process industry is considerable, and there is huge room for improvement. The national carbon emissions can be significantly reduced by reducing the energy consumption of the process industry. Under the long-term goal of "double carbon", the further improvement of the automation level of China's process industry is an inevitable trend, and there is a large market space for the upgrading of industrial control products.
Domestic substitution logic of high-end industrial control products to create a new growth curve of the company
At present, the localization rate of China's high-end industrial control / industrial software products is still low, and there is much room for domestic substitution. The company insists on investing in R & D and constantly breaks through high-end industrial control products. At present, it has ranked first-class in the world. In the first half of 2021, the company joined forces with a number of major customers to create a number of benchmark projects. DCS products successfully broke through the production units of BASF, a global chemical giant, and made great progress in high-end industrial control products. In addition, the company's strength in industrial software is also increasing. At present, the company has many advanced industrial software such as MES / APC, and actively layout basic software products such as database. In the future, industrial software is expected to become a new growth point of the company, and high-end industrial control / Industrial software products open a new growth curve for the company.
Deepen the layout of the whole industrial chain and boost the company's performance with multiple products
Zhejiang Supcon Technology Co.Ltd(688777) take the control system (DCS + SIS + PLC) as the cornerstone, create the "industrial tentacle" downward, layout the instruments and meters related products, create the "industrial smart brain" upward, and layout a variety of industrial software. There are obvious synergistic effects among various businesses to enhance the overall competitive advantage of the company. At the same time, the company cooperates with "Online + offline" to build a perfect marketing network and service system with 5S automatic housekeeper and S2B platform. In the context of intelligent manufacturing, the prosperity of the industrial control industry driven by national policies and markets has improved. As a leader of China's industrial control industry with core competitive advantages, the company has actively deepened the layout of the whole industrial chain and coordinated development of multiple products, with broad development prospects in the future.
Profit forecast and investment rating
In the era of industry 4.0, the intelligent manufacturing industry is expected to accelerate its development. As a leading enterprise of industrial control & Intelligent Manufacturing in China, the company actively promotes the layout of "one body and two wings", and there is a large development space of "one vertical and one horizontal" in the future. It is estimated that the net profit attributable to the parent company from 2022 to 2023 will be 766 million yuan and 965 million yuan respectively, corresponding to 47.10 times and 37.40 times of PE, maintaining the "buy" rating.
Risk factors
Downstream industry fluctuation risk, company development is less than expected, covid-19 epidemic spread
