\u3000\u3 Guocheng Mining Co.Ltd(000688) 100 Willfar Information Technology Co.Ltd(688100) )
Key investment points
Event: Willfar Information Technology Co.Ltd(688100) in 2021, the operating revenue was RMB 1.826 billion, with a year-on-year increase of 26.03%, and the net profit attributable to the parent company was RMB 341 million, with a year-on-year increase of 24.02%. The basic earnings per share was 0.68 yuan / share, with a year-on-year increase of 21.43%, and the performance was in line with our expectations. In Q4 of 2021, the company achieved an operating revenue of 526 million yuan, a year-on-year increase of 29.88%, and the net profit attributable to the parent company was 93 million yuan, a year-on-year increase of 40.91%.
The company's business has maintained overall growth, and its cash flow is relatively stable: all business segments of the company have maintained a growth trend. Among them, the network layer business achieved a revenue of 1.131 billion yuan, accounting for 62.17% of the operating revenue, with a year-on-year increase of 13.93%. The revenue of perception layer business was 578 million yuan, accounting for 31.81% of the operating revenue, with a year-on-year increase of 63.68%. The application layer business realized a revenue of 109 million yuan, accounting for 6.02% of the operating revenue, with a year-on-year increase of 14.21%. In 2021, the company received 1.599 billion yuan in cash from selling goods and providing labor services, accounting for 87.57% of the operating revenue. The net cash flow from operating activities was 246 million yuan, an increase of 30.27% year-on-year. Mainly due to the improvement of the turnover efficiency of accounts receivable, the turnover rate of accounts receivable increased from 2.17 in 2020 to 2.39, and the cash flow of the company was relatively stable.
Expand product application scenarios and achieve remarkable R & D results: the company launched 29 new products in 2021, including 5 application layers, 12 network layers and 12 perception layers. Among them, the application layer launched the smart cloud platform of the Internet of things, the network layer communication gateway and communication module products are still the core products of the company, and the perception layer develops electric detection terminals, digital water and other products. 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%. During this year, 65 patents and 78 software copyrights were added, and 43 national standards, industry standards, local standards and group standards were participated in. Many projects were rated as national and provincial key R & D plan projects and were selected into the first batch of regional chain + energy list.
The overseas strategy has been fully developed, and the chip business has developed rapidly: in 2021, the company achieved an operating revenue of 1.596 billion yuan in China, a year-on-year increase of 15.69%, 223 million yuan in international business, a year-on-year increase of 257.48%, and rapid growth in international business. At present, the company's overseas export product structure is gradually enriched and improved, no longer focusing on electrical monitoring terminals, adding application scenarios such as smart water, and has achieved a breakthrough in communication module and communication gateway business. The overseas sales network covers mainstream markets such as Asia, Africa and the Americas, with more than tens of millions of overseas users connected. We believe that with the continuous improvement of power grid intelligence and the continuous expansion of the company's market share outside China, the company is expected to maintain high growth.
Profit forecast and investment rating: as the change of product structure slightly affects the gross profit margin, we will reduce the EPS from 0.95/1.26 yuan to 0.90/1.19 yuan in 20222023. It is estimated that the EPS in 2024 will be 1.48 yuan, and the current market value corresponds to 27 / 21 / 17 times of PE in 20222024. Due to the continuous improvement of the company's communication module technology, we maintain the "buy" rating.
Risk warning: unstable overseas situation and intensified competition; Customer orders are less than expected; The energy promotion is not as expected.
