\u3000\u30 Jinzai Food Group Co.Ltd(003000) 48 Hiconics Eco-Energy Technology Co.Ltd(300048) )
The business divestiture and downsizing have been gradually completed, and the focus on the main business strategy is clear Hiconics Eco-Energy Technology Co.Ltd(300048) is a high-tech enterprise engaged in industrial automation control, reactive power compensation equipment, new energy storage, energy conservation and environmental protection in China. Since 2020, the company has continued to carry out business downsizing and divestiture of non core assets, which has been basically completed. The business segment of the company is mainly divided into high-end manufacturing business including frequency converter, energy conservation and environmental protection business and upcoming photovoltaic energy storage business. In 2021, the company successfully reversed its losses and will focus on the main business and new business development of frequency converter in the future.
High voltage frequency conversion industry leader, low-voltage domestic substitution opens up growth space. The company is the leader of high-voltage frequency converters in China, accounting for more than 10% of the industry market. The leading position is constantly consolidated. At present, the production capacity of high-voltage frequency converters is about 1600 sets, and the new production line is about to be put into operation. It is expected to expand the production by more than 50% to 2500 sets / year. In terms of low-voltage frequency converters, the company currently has a low low-voltage market share. It adopts the strategy of breaking through industries one by one, continuously expands the product industry coverage, and the proportion of business in the company's revenue has increased steadily. We believe that the future energy conservation and environmental protection policies will benefit the high-speed growth of the low-voltage inverter industry, and the continuous domestic substitution will bring huge growth space for the company's low-voltage business.
The operation of the company is back on track, and there is broad room for improvement in the profitability of its main business. From the perspective of profitability of frequency converter business, the company's current gross profit margin of frequency converter business is about 30 ~ 35%, which is significantly lower than that of peer companies. With the scale effect brought by the expansion of the company's business scale, technological improvement, improving the cost control ability, adjusting the business structure, increasing the proportion of high-performance high-voltage frequency converter products with stronger profitability, and the group's Collaborative Procurement to reduce the cost of raw materials, the profitability of the company's frequency converter business has a lot of room to improve.
Midea's deep empowerment will be the coordinator of the group's green power strategy in the future. In April 2020, Midea Group Co.Ltd(000333) became the controlling shareholder of the company. The company undertook the overall planning and implementation of Midea Group Co.Ltd(000333) green strategic green power project, and will make a new layout in photovoltaic and energy storage business. We believe that the deep empowerment of beauty is reflected in:
1) coordination of R & D and production resources: new energy products mainly include inverters, household energy storage, distributed photovoltaic, etc. Midea deeply empowers Hekang in terms of capital investment, R & D project approval personnel investment and production and procurement resources, so as to accelerate the speed of product innovation and market brand building.
2) channel resource empowerment: at present, the main planned market of the company's energy storage products is overseas, Midea Group Co.Ltd(000333) has a strong sales channel network overseas, benchmarking Pylon Technologies Co.Ltd(688063) uses ZTE channels to expand overseas business, Midea Group Co.Ltd(000333) also has the ability to jointly promote the company's products overseas; In the Chinese market, on the one hand, Midea's internal collaborative photovoltaic roof and other projects can bring incremental business to the company. Secondly, referring to the step-by-step photovoltaic promotion mode of Skyworth Group, Midea's sinking channel in China and its after-sales installation coverage of andezhilian may lay a foundation for the company to expand other photovoltaic businesses in China.
Profit forecast and investment rating: the past 1-2 years is a critical period for R & D investment and market expansion. The company is expected to seize the opportunities of Midea R & D, capital empowerment and new energy market, quickly expand revenue, expand market share at home and abroad, and form the integration advantages of core devices (such as inverter), complete machine, channel and brand industrial chain. We expect the company's revenue in the year of 21-23 to be 1.207/2.025/2.934 billion yuan, with a year-on-year increase of - 4.0 / + 67.9 / + 44.8%; The net profit attributable to the parent company was RMB 0.6/1.2/190 million, with a year-on-year increase of + 111.5/101.8/57.0%, corresponding to 144 / 71 / 45 times of PE. It was covered for the first time and given a "buy" rating.
Risk factors: the business expansion of low-voltage frequency converter is less than expected, the cost of raw materials is rising, the expansion of overseas energy storage business is less than expected, and the expansion of photovoltaic business in China is less than expected
