\u3000\u3 Guocheng Mining Co.Ltd(000688) 100 Willfar Information Technology Co.Ltd(688100) )
Event overview: on February 28, 2022, the company issued the annual report of 2021. In 2021, the company achieved 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%. In terms of products, the revenue of perception layer, network layer and application layer was 578 / 1130 / 109 million yuan respectively, with a year-on-year increase of 63.7% / 13.9% / 14.2% respectively. In a single quarter, Q4 achieved a revenue of 526 million yuan, a year-on-year increase of 30.11% and a month on month increase of 17.20%; The net profit attributable to the parent company was 93 million yuan, with a year-on-year increase of 40.27% and a month on month increase of 15.07%.
The business covers the whole industrial chain of IOT communication chips, and the demand for the company's core products continues to rise: the company has laid out all levels of IOT communication chips, and the revenue of each business segment increased rapidly in 2021. In the future, the company has a long-term competitive advantage in the field of smart grid. The company has won all bid sections in the centralized procurement of power information acquisition materials projects of State Grid and South grid, highlighting the strong comprehensive strength of the company's products. In 2022, China's smart meters will usher in a new round of replacement cycle. The demand for meter replacement of the State Grid alone may exceed 500 million, corresponding to the market space of the company's products may exceed 30 billion yuan; At the same time, switches, circuit breakers and other terminals have the need for intelligent transformation, the technical barriers of relevant communication modules and chips are higher, and the potential market space is huge. Communication module and communication gateway products are the core products of the company, and the technical level of the products is leading. The company is expected to consolidate its leading position and maintain a high performance growth rate in the future.
The long-term layout of overseas markets has achieved remarkable results in business expansion: the company adheres to the two-line driving strategy of foreign business in China, and its business has made a breakthrough in overseas markets. In 2021, the one of the "one belt, one road" countries formed the integrated energy integration service advantage based on the AMI solution. Meanwhile, one belt, one road, has been successfully implemented in the electric water gas industry. In 2021, the company's overseas business achieved a sales revenue of 223 million yuan, a year-on-year increase of 257.48%. The company has laid out its main markets in Asia, Africa and South America, and has offices in Egypt, West Africa, Bangladesh and Indonesia. On the whole, the overseas business has a good momentum of development.
The proportion of R & D investment kept increasing and the iteration of product upgrading was accelerated: in 2021, the company's R & D investment reached 177 million yuan, a year-on-year increase of 36.51%, and the proportion of R & D investment in total revenue increased to 9.69%, a year-on-year increase of 0.74pct. The company's main products focus on the field of new power system construction under the background of "double carbon", grasp the opportunity of updating many product standards of energy system and power system, actively promote the renewal and iteration of new technologies, and strengthen the comprehensive competitiveness of the company's products in the industry.
Investment suggestion: we expect the company's revenue from 2022 to 2024 to be 2.506 billion yuan, 3.478 billion yuan and 4.944 billion yuan respectively, with a growth rate of 37% / 39% / 42%; The net profit attributable to the parent company was 469 million yuan, 663 million yuan and 962 million yuan respectively, with a growth rate of 38% / 41% / 45%, corresponding to 27x / 19x / 13X PE in 22-24 years. The comprehensive strength of the company's products is excellent, the downstream demand is growing, and the "recommended" rating is maintained.
Risk warning: risk of new technology research and development; Risk of customer concentration; Risk of fluctuation of raw materials.
