\u3000\u3 Shengda Resources Co.Ltd(000603) 179 Jiangsu Xinquan Automotive Trim Co.Ltd(603179) )
Event overview
The company announced its 2021 annual report: in 2021, the revenue was 4.61 billion yuan, a year-on-year increase of 25.3%, the net profit attributable to the parent was 280 million yuan, a year-on-year increase of 10.2%, and the net profit not attributable to the parent was 260 million yuan, a year-on-year increase of 3.9%; Among them, 2021q4 achieved a revenue of 1.35 billion yuan, a year-on-year increase of 20.6%; The net profit attributable to the parent company was 60 million yuan, a year-on-year decrease of 28.6%, and the net profit not attributable to the parent company was 70 million yuan, a year-on-year decrease of 22.2%.
Analysis and judgment:
Rapid growth of revenue and incremental contribution of new energy
The company’s revenue in 2021 was + 25.3% year-on-year, of which 2021q4 revenue was + 20.6% year-on-year and + 34.6% month on month. We judged that the same month on month growth mainly benefited from the rapid growth of passenger vehicle business driven by the incremental contribution of new energy, while the commercial vehicle business was under pressure due to the weakness of heavy truck sales (year-on-year – 14% in 2021). The growth rate of net profit deducted from non parent company was significantly lower than that of revenue, mainly due to the year-on-year decline of gross profit margin and the year-on-year increase of expense rate. Looking forward to 2022, with the further increase of the proportion of new energy business and the slowdown of the impact of the price rise of raw materials, the performance is expected to return to high growth.
The gross profit margin is under short-term pressure, and the R & D expenses continue to increase
The gross profit margin of the company reached 21.3% in 2021, with a year-on-year rate of – 1.7pct, of which the gross profit margin of 2021q4 was 20.8%, with a year-on-year rate of – 2.6pct and a month on month rate of + 2.1pct. We judged that the year-on-year decline was mainly affected by the increase in the proportion of passenger car business with low gross profit margin and the rise in the price of raw materials. The month on month recovery benefited from the increase in the utilization rate of production capacity and the rise in the price of raw materials. In terms of expenses, in 2021, the R & D expenses reached 220 million yuan, a year-on-year increase of + 49.0%, and the corresponding R & D expense rate increased from + 0.8pct to 4.9%, mainly due to the increase of new projects and R & D investment in new processes and technologies; The sales expense rate and financial expense rate were – 0.2pct, – 0.6pct to 4.6% and 0.6% year-on-year, and the management expense rate was + 0.2pct to 4.6% year-on-year, mainly due to the increase of amortization and depreciation of intangible assets and the increase of employees.
Ride business two wheel drive sword finger interior faucet
Passenger cars: actively embrace new energy and increase both volume and price. The company actively embraces new energy, enters Tesla‘s supply system and demonstrates its competitive strength. It is expected to grow with Tesla and realize the simultaneous increase of volume and price. In addition, it also expands new energy vehicle types such as ideal vehicle, velai vehicle, Byd Company Limited(002594) , GAC new energy, Geely vehicle, Great Wall Motor Company Limited(601633) and so on. In the medium and long term, under the increasing pressure of global auto enterprises to reduce costs, the replacement of interior decoration imports has accelerated, and the scale of China has reached 100 billion yuan. We judge that the penetration rate of independent brands will continue to increase. The company is expected to seize the share with high cost performance and rapid response ability, and the revenue is expected to exceed 15 billion yuan in 2025.
Commercial vehicles: category expansion + globalization, and the share continues to increase. The company’s commercial vehicle customers mainly include Faw Jiefang Group Co.Ltd(000800) , BAIC Foton, etc., and the supporting share is expected to reach more than 60%. In the future, the company will accelerate the penetration of other customers and realize global supporting by expanding categories and upgrading with heavy trucks.
Investment advice
New power supply chain + independent brand supply chain, import substitution sword refers to the global leader in interior decoration: the company actively embraces new energy and gradually expands new power customers such as Tesla, ideal and Weilai, which is expected to accelerate the increase of market share by virtue of high cost performance and rapid response ability. Taking into account the increase in the proportion of new energy business, adjust the profit forecast: it is estimated that the revenue in 202223 will be adjusted from RMB 6.66/7.96 billion to RMB 6.74/8.5 billion, the net profit attributable to the parent company will be adjusted from RMB 550 / 730 million to RMB 550 / 720 million, and the EPS will be adjusted from RMB 1.46/1.95 to RMB 1.47/1.91. The revenue and net profit attributable to the parent company in 2024 will be RMB 10.3/900 billion respectively, corresponding to EPS of RMB 240, Corresponding to the closing price of RMB 40.78 in 2022, PE 28 / 21 / 17 times. Referring to the average valuation level of Tesla industrial chain, the company is given 32 times PE in 2022, the target price is adjusted from 46.72 yuan to 47.04 yuan, and the “buy” rating is maintained.
Risk tips
The sales volume of the passenger car industry is lower than expected, the customer expansion is lower than expected, the industry competition is intensified, and the cost of raw materials is increased.
