\u3000\u3 Guocheng Mining Co.Ltd(000688) 665 Cubic Sensor And Instrument Co.Ltd(688665) )
Events
The company issued the draft of equity incentive, and plans to grant 1.15 million restricted shares to the incentive object, accounting for 1.64% of the total share capital of the company on the announcement date. The performance evaluation target is that the net profit attributable to the parent company will increase by 30%, 25% and 20% respectively from 2022 to 2024.
Brief comment
① horizontal: the company has formed a complete optical sensor technology platform and has strong business scalability in the future. Different light sources and algorithms are required to detect different gas media. The company has formed a complete optical sensing technology platform such as laser, infrared and Raman, which can expand different application fields and meet the needs of customers in different scenes. In recent years, the company’s business development extends from air purifiers to vehicle mounted, fresh air, ultrasonic gas meters, medical oxygen sensors, new energy vehicle batteries, refrigerant monitoring and other fields. In 2021, it is expected to achieve an operating revenue of 548 million yuan (year-on-year + 77.98%) and a net profit of 180 million yuan (year-on-year + 113.33%). Recently, the market has paid attention to the lithium battery monitoring sensor products of new energy vehicles. By monitoring the gas composition in the battery package, it can give an early warning before the battery loses thermal control and win passengers a few more minutes of escape time, which is very important for the safe driving of new energy vehicles. The progress of relevant product certification is worth looking forward to.
② vertical: on the one hand, it extends to the upstream to improve the self production rate of parts, on the other hand, it extends to the downstream to cut into the whole machine and control the market, and the market space is doubled. The self production rate of laser tubes and fans of the company has continuously increased, reaching about 90%. In the first three quarters of 2021, the comprehensive gross profit margin is 50.46% and the net profit margin is 32.76%, which has increased by 3.67pct and 6.96pct compared with the same period in 2020. Against the background of the rise in the price of raw materials and bulk commodities, the company still realizes the rise of gross profit margin and maintains strong quality control and moat. The company expands downstream. Analytical instruments and ultrasonic gas meters are examples. These two businesses are expected to achieve rapid growth this year; At the same time, the company made efforts to the controller, combined the sensor with the alarm / controller, and further opened the market space in depth. The refrigerant monitoring sensor is used to monitor the leakage of refrigerant in the air conditioning system, which is worth looking forward to.
③ excellent senior management team. The company’s senior executives have technical background, strong insight, strong decision-making and execution, and have a global vision, which is also the basis for the company to continuously explore overseas needs and directly participate in international market competition. The company is the first-class and only supplier of Midea, Daikin, Hisense and Jaguar Land Rover. There are few competitors with similar strength in China. With the upgrading of consumption and industry and the continuous expansion of gas sensor application fields, the company is expected to continue to grow at a high speed. The equity incentive set a performance growth target of 20% – 30% in the next three years, which also demonstrates the company’s confidence in future development.
Profit forecast: considering the expense provision of equity incentive, we expect the net profit attributable to the parent company to be RMB 180 million, RMB 256 million and RMB 391 million from 21 to 23, with a year-on-year growth rate of 114% / 42% / 53% respectively, maintaining the “buy” rating.
Risk tip: the market expansion in new fields is less than expected, and the overseas market expansion is less than expected
