\u3000\u3 Guocheng Mining Co.Ltd(000688) 100 Willfar Information Technology Co.Ltd(688100) )
Event: the company released its annual report for 2021. In 2021, the company realized a revenue of 1.826 billion yuan, a year-on-year increase of 26.03%; The net profit attributable to the parent company was 341 million yuan, a year-on-year increase of 24.02%.
Our comments are as follows:
The whole series of businesses have moved forward steadily, and the layout of markets outside China has achieved remarkable results
In 2021, the company continued to achieve double growth in revenue and net profit, both of which reached a record high in Willfar Information Technology Co.Ltd(688100) performance. In a single quarter, 21q4 achieved a revenue of 526 million yuan, with a year-on-year / month on month increase of 30.11% and 17.20%; The net profit attributable to the parent company was 93.11 million yuan, with a year-on-year / month on month increase of 40.27% and 15.06%. In the past 21 years, the company continued to operate steadily and the whole series of businesses continued to grow: the network layer achieved a revenue of 1.131 billion yuan, accounting for 62.17% of the main revenue, with a year-on-year increase of 13.93%; The revenue of perception layer was 578 million yuan, accounting for 31.81% of the main revenue, with a year-on-year increase of 63.68%; The application layer achieved a revenue of 109 million yuan, accounting for 6.02% of the main revenue, with a year-on-year increase of 14.21%. In 2021, China’s business grew steadily and international business grew rapidly: China’s business realized a revenue of 1.596 billion yuan, a year-on-year increase of 15.69%; The international business revenue was 25.72 billion yuan, a year-on-year increase of 25.72%. In addition, Willfar Information Technology Co.Ltd(688100) its two main subsidiaries, Weiming energy and Zhuhai Zhonghui, achieved double growth in revenue and net profit: in 21 years, Weiming energy’s operating revenue was 221 million yuan, a year-on-year increase of 14.28%, and its net profit was 29.67 million yuan, a year-on-year increase of 6.79%; Zhuhai Zhonghui’s operating revenue was 318 million yuan, a year-on-year increase of 82.02%, and its net profit was 77.77 million yuan, a year-on-year increase of 226.61%.
The implementation of intelligent manufacturing, continuous fine control, continuous improvement of cash flow and abundant orders on hand
The company has built a digital chemical plant, created a full life cycle quality management system, realized full digital traceability supervision, lean management, created high-quality products, completed the transformation from traditional production mode to intelligent manufacturing, and the intelligent production level has reached the advanced level of the industry. The gross profit margin and net profit margin of the company in 21 years were 34.93% and 18.75% respectively, with a year-on-year decrease of 1.1 percentage points, mainly due to the change of product structure. The company continued to fine control. In the past 21 years, the rates of sales, management and financial expenses were 4.75%, 1.86% and – 1.50% respectively, with a total of 5.11%, a year-on-year decrease of 0.92 percentage points. The net cash flow from the company’s operating activities in 21 years was 246 million yuan, an increase of 30% year-on-year; By the end of the 21st century, the number of orders on hand was 1.77 billion yuan, providing strong support for the follow-up performance. In terms of R & D Investment: in the past 21 years, the company has focused on the research of new power system, edge computing and communication technology, continuously increased development investment, continuously strengthened R & D strength and achieved fruitful innovation results; In 21 years, the company invested 177 million yuan in R & D, accounting for 9.69% of the operating revenue, with a year-on-year increase of 36.51%.
We will continue to maintain the leading position in the industry, grasp high-quality customer resources and help improve the industry
The company continues to maintain its industry advantages. According to the statistical results of the bid winning situation of the State Grid and China Southern Power Grid over the years, the company’s products are among the best and are in the first echelon in the industry. At the same time, the company was shortlisted in 23 provincial power companies in 21 years, with a total bid winning amount of nearly 330 million yuan in provincial procurement bidding, ranking second in market share. Relying on its independent R & D and innovation capability, high-quality manufacturing strength, reliable supply chain and advanced quality assurance system, the company has established long-term and sustainable cooperative relations with central enterprises such as State Grid and China Southern Power Grid and world top 500 enterprises such as Siemens. In 21 years, the company has become a strategic cooperative enterprise of Tencent in the field of Internet of things, Tencent will also be introduced to invest in the Internet industry and digital smart cities.
Profit forecast and investment suggestions: during the 14th Five Year Plan period, a total investment of about 3 trillion yuan will be invested in the new power system with new energy as the main body to help achieve the dual carbon goal. The national power grid will further accelerate the pace of digital transformation of the power grid. The company’s main business mainly focuses on intelligent products at the distribution side, which is expected to benefit fully. With the development strategy of “IOT world, core and future”, the company is one of the first enterprises to layout the core technology of energy Internet. It has accumulated many years of application and development experience in the industry, focusing on the Internet of things of power and smart city. With a complete industrial chain layout, the company is a leading energy Internet comprehensive solution provider in China, with broad growth space in the future. Taking into account the changes in the company’s product structure, the net profit of 22-24 years is expected to be 457 million (original value 512 million), 610 million (original value 699 million) and 815 million yuan respectively, corresponding to 27.6x/20.7x/15.5x PE in 22-24 years, maintaining the “buy” rating.
Risk warning: risk of new technology R & D and new product development; The concentration of downstream customers may cause business fluctuations; Market competition risk; The overseas business development caused by the macro environment and epidemic situation did not meet expectations; The project delivery progress is less than expected, etc
