\u3000\u3 Guocheng Mining Co.Ltd(000688) 021 Aofu Environmental Technology Co.Ltd(688021) )
Performance
The company released the annual report of 2021. In 2021, the company achieved an operating revenue of 396 million yuan, a year-on-year increase of 26.06%, and the net profit attributable to the parent company was 66 million yuan, a year-on-year decrease of 17.74%.
Analysis
The overall revenue has maintained steady growth, and the products of national six are in an orderly and excessive manner. 2021 is a year when the national six emission catalytic standard is fully implemented, which will drive the demand for emission catalytic materials to increase significantly. However, since 2021 is the year when the standard is implemented, the output is affected by the lack of core in the industry, and the buffer time given by the policy leads to the disturbance of national five inventory, the incremental effect of national six is not fully displayed. At the same time, in the early stage of standard upgrading, both engine manufacturers and vehicle manufacturers in the downstream prefer to use the products of foreign-funded enterprises with rich experience and perfect technology to ensure the safe supply and stable operation of products. Therefore, although 2021 is a year of great changes in the industry brought about by the implementation of the sixth national plan, the overall domestic enterprises are still affected by upgrading. In 2021, the company still achieved year-on-year growth in sales revenue, with a year-on-year growth of 26% and a year-on-year growth of 32.65% in the fourth quarter. The company has successfully realized the order conversion from national five to national six.
The failure to realize large-scale production in the short term affects the profitability of products, and it is expected to gradually improve the profitability in the long term. 2021 is a year for the company to switch products from national five to national six. Although the company supplies national six products overseas in the early stage, in the process of switching to national six products as a whole, the scale of single product is relatively small, the yield rate of products has decreased compared with the original. At the same time, the capacity utilization rate needs to climb. In the early stage of supply, effective scale effect has not been realized, and the gross profit margin of products has decreased significantly, At the same time, the company’s expense rate has increased in the process of capacity construction, driving the short-term pressure on the profitability of products. In the long run, on the one hand, the increase in the scale of the company’s single product supply will drive the increase in capacity utilization,; On the other hand, with the continuous stability and maturity of the company’s technology, the company’s product yield will also be improved, driving the improvement of product profitability.
The company continues to strengthen product research and development, seize opportunities and improve product market share. In 2021, the company significantly improved the construction of its own R & D team, and the overall R & D personnel increased from 93 in 2020 to 148 at the end of 2021, with a year-on-year increase of 59%. At the same time, the company has achieved batch supply of national VI emission standard projects of 9 main engine plants, and the sales volume of foreign export products has basically returned to the pre epidemic level. The company is expected to continue to make efforts in national VI phase, Gradually increase the market share of products and accelerate the process of localization.
Investment advice
Affected by the periodic decline in gross profit caused by short-term product upgrading, the company lowered its profit forecast of 31% and 20% in 2022 and 2023. It is predicted that the net profit attributable to the parent company from 2022 to 2024 will be 119, 186 and 262 million yuan, EPS will be 153, 241 and 3.39 yuan, and the corresponding PE will be 33, 21 and 15 times, maintaining the “buy” rating.
Risk tips
Risk of domestic and overseas epidemic affecting automobile sales; The products imported by downstream customers did not meet expectations.
