Shanghai Sk Automation Technology Co.Ltd(688155) (688155)
The company released the third quarterly report of 2021. In the first three quarters, the operating revenue was 735 million yuan, a year-on-year increase of 143.65%, and the net profit attributable to the parent company was 70 million yuan, a year-on-year increase of 124.33%; In the third quarter alone, the operating income was 199 million yuan, a year-on-year increase of 130.97%, and the net profit attributable to the parent company was 02 million yuan.
Key points supporting rating
The operating revenue maintained rapid growth and the profitability decreased slightly. Due to the continuous expansion of the new energy vehicle power battery plant, the company’s orders and revenue increased rapidly. In the first three quarters, the operating revenue was 735 million yuan, a year-on-year increase of 143.65%, and the net profit attributable to the parent company was 70 million yuan, a year-on-year increase of 124.33%. In terms of profitability, in the first three quarters, the gross profit margin was 30.49%, a year-on-year decrease of 2.28pct, and the net profit margin was 9.78%, a year-on-year decrease of 0.46pct. We believe that it is mainly due to the increase of raw material prices and expenses.
Affected by the business rhythm and scale expansion, the loss performance in the third quarter was lower than expected. The company achieved an operating revenue of RMB 199 million in the third quarter of 2021, with a year-on-year increase of 130.97% and a month on month decrease of 48.3%; The net profit attributable to the parent company was a loss of 02 million yuan. We believe that it is mainly caused by the business rhythm and the expansion of the company’s scale during the reporting period: 1) most of the company’s orders adopt the “3331” payment mode, so there is a certain cyclical volatility. From the historical data, the business data in the third quarter of previous years are lower than that in the second quarter; 2) In order to absorb the orders with a substantial increase, the company chose to expand its production capacity, the number of employees increased significantly, and the cost, salary, expense and tax expenditure increased significantly year-on-year.
There are sufficient orders on hand, and breaking through the capacity bottleneck will bring performance growth in the future. According to the latest announcement of the company, since the fourth quarter of 2020, as of October 21, 2021, the company has received about 1.006 billion yuan of orders from Contemporary Amperex Technology Co.Limited(300750) , which is 2.2 times of the company’s revenue of 502 million yuan in 2020. On the one hand, it provides strong support for the company’s short-term performance, on the other hand, it also proves the hard strength of the company’s products. At present, the company has sufficient capacity reserves. 40000 square meters of plants will be added in Wuhan, Shanghai and Changsha respectively, and all will be put into use by the end of 2022. At that time, the total capacity area will reach 120000 square meters.
Valuation
Although the company’s performance in the third quarter was less than expected due to the impact of business rhythm, the performance is expected to improve significantly in the fourth quarter with the gradual recognition of revenue from orders on hand. It is expected that the company’s revenue in 2021-2023 will be RMB 1.34/23.1/3.18 billion and net profit of RMB 170 / 2.9/3.9 billion respectively, maintaining the buy rating.
Main risks of rating
The sales volume of new energy vehicles is lower than expected; The production expansion speed of power battery manufacturers is lower than expected; Industry competition intensifies
