\u3000\u3 Guocheng Mining Co.Ltd(000688) 777 Zhejiang Supcon Technology Co.Ltd(688777) )
Event:
After the closing on February 24, 2022, the company issued the announcement of 2021 annual performance express and the announcement on the acquisition of 22% equity of petrochemical Yingke Information Technology Co., Ltd. in cash.
Comments:
The total operating revenue increased by 43.08% year-on-year, and the net profit deducted from non parent company increased by 39.10% year-on-year
In 2021, the company achieved a total operating revenue of 4.519 billion yuan, a year-on-year increase of 43.08%; The total profit was 631 million yuan, a year-on-year increase of 35.76%; The net profit attributable to the parent company was 578 million yuan, a year-on-year increase of 36.54%; The net profit deducted from non parent company was 452 million yuan, with a year-on-year increase of 39.10%. The reasons for the high growth: 1) the company’s advantageous products, industrial automation control system products, continued to expand market share and achieved high growth in orders; 2) The overall solution business of industrial software and intelligent manufacturing, which is the key layout of the company, has grown rapidly, and the revenue of the current period has increased significantly, resulting in a significant increase in profits.
The demand for digital transformation of process industry is strong, and the company’s product and technical advantages are continuously improving
In 2021, the digital transformation of China’s process industry will be further upgraded, the demand for high-end automation, digitization and intelligence in the manufacturing industry will continue to rise, and the demand of downstream customers will be strong. Through the new Wuxi Online Offline Communication Information Technology Co.Ltd(300959) service mode of 5S automatic housekeeper and S2B platform, the company has achieved an increase in the customer coverage of process industry, broke through multiple top customers, further consolidated and improved its market position in China, and achieved a significant increase in operating revenue. In addition, the company continued to increase R & D investment and further accumulated product and technical advantages. In 2021, a new generation of control system products, a new generation of real-time database, intelligent factory platform software and other industrial software products were launched, adding the application scenarios of intelligent factory for downstream customers. The company’s advantages in automation, digitization and intelligent technology and products in the industrial field have been further improved.
It is proposed to acquire 22% equity of Sinopec Yingke Information Technology Co., Ltd. with cash of 561 million yuan, in order to strengthen the strategic layout of the company’s “industry 3.0 + industry 4.0” and 5T (process technology Pt + equipment technology et + operation technology ot + automation technology at + information technology it) business, and improve the company’s comprehensive competitiveness in the field of digitization and intellectualization PCCW intends to sign the equity transfer agreement to transfer the 22% equity of PCCW held by PCCW resources for 561 million yuan. After the transaction is completed, PCCW will become an important joint-stock subsidiary of the company. PCCW’s layout consulting, operation and management, production management and operation and maintenance business segments provide industry wide, professional and whole process comprehensive solution services for enterprise information construction in the energy and chemical industry.
Profit forecast and investment suggestions
The company is committed to meeting the needs of “industry 3.0 + industry 4.0” of process industry enterprises. Through years of development, the company has grown into an overall solution provider of intelligent manufacturing, and there is a broad growth space in the future. Referring to the announcement of 2021 annual performance express, the company’s operating revenue forecast from 2021 to 2023 is adjusted to 4.519, 5.890 and 7.347 billion yuan, the net profit attributable to the parent company is adjusted to 578, 737 and 941 million yuan, and the EPS is 1.17, 1.49 and 1.91 yuan / share, corresponding to 66.29, 51.97 and 40.69 times of PE. At present, the company is in the stage of rapid development, with more market opportunities and more investment in R & D and market expenses. Therefore, the net profit margin is low, and the PS valuation method is more appropriate. Since listing, the company’s PS has mainly operated in the range of 8-20 times. With reference to the current valuation level, the company’s target PS in 2022 has been adjusted to 9 times, and the corresponding target price is 106.69 yuan. Maintain the “buy” rating.
Risk tips
Covid-19 recurrent pneumonia; 4.0 less than the industrial business expectation; Risk of core parts supply; Demand fluctuations in downstream industries such as chemical, petrochemical and pharmaceutical industries; DCS R & D and promotion are not as expected.
