\u3000\u3 China Vanke Co.Ltd(000002) 050 Zhejiang Sanhua Intelligent Controls Co.Ltd(002050) )
Event: Zhejiang Sanhua Intelligent Controls Co.Ltd(002050) released the performance express of 2021 and the operating data from January to February 2022. The company achieved revenue of 15.97 billion yuan in 2021, yoy + 31.9%; Achieved a performance of 1.68 billion yuan, yoy + 15.0%. Converted 2021q4 single quarter revenue of 4.25 billion yuan, yoy + 20.9%; The performance was 390 million yuan, yoy + 5.1%. Sanhua achieved an income of 3.06 billion yuan from January to February 2022, yoy + 40%; The performance is 290 million yuan, yoy + 30%. We judge that with the order delivery of new energy vehicles, Sanhua’s future performance is expected to maintain rapid growth.
Rapid growth of the company’s revenue: the revenue of Sanhua Q4 in the single quarter and from January to February 2022 increased rapidly. From the perspective of spin off: 1) the large volume of new energy vehicle business has effectively driven the growth of the company’s revenue end. We estimate that the zero business income of Sanhua automobile in 2021q4 is about 1.4 billion yuan, with a year-on-year growth rate of about 60%; From January to February 2022, the zero income of Sanhua automobile was about 1.1 billion yuan, maintaining rapid growth. 2) The main household appliance industry has developed steadily. Taking air conditioning parts as an example, according to the industry online, the sales growth of 2021q4 electronic expansion valve, stop valve and four-way valve in the industry were 17.2% / 6.3% / 17.6% and 6.5% / 20.4% / – 4% respectively. Sanhua is a leading enterprise in the industry, and Q4 refrigeration accessories business has maintained good growth. Looking forward to the next few quarters, we analyze that with customer expansion and order delivery, Sanhua’s revenue end is expected to maintain a rapid growth trend.
Profitability declined: the net interest rate of Sanhua Q4 in the single quarter and from January to February 2022 was – 1.5pct / – 0.7pct year-on-year. According to our analysis, the main reasons for the decline of the company’s net profit margin are: 1) the sharp rise in the price of raw materials. 2) The main products of auto parts business are integrated module components. In this product, some parts are purchased externally, which reduces the company’s gross profit margin. 3) The fluctuation of RMB exchange rate also has a certain impact on profitability. Combined with industrial research, we learned that the company has adjusted the price of downstream customers by optimizing product structure and other ways to stabilize profitability.
Investment suggestion: we expect the business of Sanhua household appliances to grow steadily. With the large volume of new energy vehicles, the auto zero business will develop rapidly. We expect that the company’s EPS from 2021 to 2022 will be 0.47/0.64 yuan, and the six-month target price will be 19.20 yuan, corresponding to 30 times PE in 2022, maintaining the investment rating of buy-a.
Risk tip: the RMB appreciated sharply and the price of raw materials rose
