\u3000\u3 Guocheng Mining Co.Ltd(000688) 187 Zhuzhou Crrc Times Electric Co.Ltd(688187) )
The performance express released that the revenue and performance in 2021 were under pressure, and Q4 improved month on month. The company issued the performance express for 2021. During the reporting period, the company achieved operating revenue of 15.12 billion yuan (yoy-5.69%) and attributable net profit of 2.02 billion yuan (yoy-18.49%). It is estimated that 2021q4 company will achieve revenue of 6.6 billion yuan (YoY + 7.2%) and net profit of 820 million yuan (yoy-16.7%), and the revenue growth rate in the fourth quarter will improve month on month (2021q3 revenue growth rate is – 25.1%).
The investment in railway fixed assets decreased, and the rail transit business sector was under pressure. The revenue of rail transit business segment of the company accounts for about 80%. The repeated epidemic in 2021 affected the transportation and passenger travel, and the traffic volume and railway construction in China continued to slow down. In 2021, the fixed asset investment of National Railways was 748.9 billion yuan (yoy-4.22%), which was the lowest in recent years. In the same period, the investment in new manufacturing of national railway mobile equipment decreased significantly year-on-year, which had a certain impact on the rail transportation sector of the company. The scale of national railway investment continued to decline after 2019, but the monthly growth rate turned positive in 2021q4. Under the background of steady growth, the growth rate of railway fixed investment is expected to be repaired in stages. In the first three quarters of 2021, the revenue of the rail transit sector of the company was 6.834 billion (yoy-17.75%), and the decline in revenue of the rail transit sector is expected to narrow in 2021q4.
The emerging business sector maintained steady growth, and the implementation of production capacity supported subsequent development. The company’s emerging business segment accounts for about 20% of the revenue, mainly including power semiconductors, industrial converters, new energy electric drives and other production lines. In the first three quarters of 2021, the revenue of emerging business segment was 1.489 billion yuan (+ 28.52%), of which the revenue of power semiconductor was 727 million yuan (+ 47%). The company adopts IDM mode to develop IGBT business, has the advantage of self-research, and has few but excellent chip categories. It is one of the few manufacturers in China to realize vehicle specification level IGBT batch shipment. At present, the company’s production capacity is in the leading position in China: the annual production capacity of phase I production line is 120000 pieces, mainly for high-voltage products, and the capacity utilization rate is saturated,; The phase II production line has an annual capacity of 2400008-inch wafers, mainly for low-voltage products, and the capacity is in the climbing stage. Combined with the IGBT packaging production line jointly constructed by the company and Guangzhou automobile, Dongfeng and other automobile enterprises, it is expected to maintain a high growth trend by closely following the industry demand. It is expected that 2021q4 emerging business segment will achieve good revenue growth driven by IGBT, new energy vehicle electric drive and industrial converter. Considering the heavy asset investment and capacity climbing progress of IGBT business under IDM mode, it is estimated that the business has not yet generated profit contribution.
Profit forecast. Based on the assumption of the recovery of rail transit fixed asset investment and the continuous release of the company’s power semiconductor production capacity, the company’s net profit attributable to the parent company is expected to be 2.02 billion, 2.47 billion and 2.79 billion from 2021 to 2023, with EPS of RMB 143, 1.74 and 1.97 respectively. The current P / E ratio is 46, 38 and 33 times. There are great differences between the two business segments of the company, and the segment valuation method is adopted: considering the dominant position of the company’s rail transit traction equipment and electrification products, combined with the industry valuation level, the company’s rail transit segment is valued at 20-25 times of the reasonable P / E ratio in 2022; Considering that the company, as a leading enterprise of domestic vehicle gauge grade IGBT, has the ability to benchmark overseas first-line products, combined with the peer valuation, the company’s Beijing Emerging Eastern Aviation Equipment Co.Ltd(002933) sector is valued at 20-30 times of the reasonable market sales rate in 2022, with a reasonable range of 69.6-86.0 yuan. It is covered for the first time and given a “recommended” rating.
Risk tip: the price of raw materials fluctuates sharply, rail transit investment declines, market competition intensifies, the production progress of phase II IGBT lags behind, and the development of downstream customers is less than expected
