\u3000\u3 China Vanke Co.Ltd(000002) 050 Zhejiang Sanhua Intelligent Controls Co.Ltd(002050) )
Event: in 2021, the company achieved an operating revenue of 15.971 billion yuan, a year-on-year increase of + 31.88%; The net profit attributable to the parent company was 1.682 billion yuan, a year-on-year increase of + 15.02%; The net interest rate attributable to the parent company was 10.53%, with a year-on-year increase of -1.54pct. In 2021q4, the company achieved an operating revenue of 4.251 billion yuan, a year-on-year increase of + 20.89%; The net profit attributable to the parent company was 389 million yuan, a year-on-year increase of + 5.06%; The net interest rate attributable to the parent company was 9.14%, with a year-on-year increase of -1.38pct. From January to February 2022, the company achieved an operating revenue of 3.06 billion yuan, a year-on-year increase of + 40%; The net profit attributable to the parent company was 290 million yuan, a year-on-year increase of + 30%; The net profit margin attributable to the parent company was 9.48%, an increase of 0.34pct compared with 21q4, and the profitability of the company was better.
The annual revenue performance in 2021 is in line with expectations. We expect that the company’s refrigeration, air conditioning and electrical parts business will achieve a revenue of 11 billion yuan, and the auto parts business will double, generating a revenue of about 5 billion yuan. The development of both sectors will outperform the growth of the downstream market, reflecting the company’s strong competitiveness in the field of new energy vehicles and refrigeration. In terms of profitability, the company’s net profit margin attributable to the parent company in 2021 was 10.53%, with a year-on-year rate of -1.54pct, and the net profit margin attributable to the parent company in 21q4 was 9.14%, with a year-on-year rate of -1.38pct. We believe that the main reasons for the decline of profitability are: 1) the continuous pressure on the cost of raw materials. Taking aluminum used more in the company’s auto parts business as an example, the price remained volatile and upward in 2021, By the end of the 21st century, the aluminum price had reached a 10-year high, resulting in continuous pressure on the company’s manufacturing costs. 2) The rising sea freight price has put pressure on the company’s transportation cost, and the proportion of overseas business in 2021h1 has exceeded that of Chinese business. 3) With the rapid development of the company’s auto parts business, the proportion of components with relatively low gross profit has increased, which has dragged down the overall profitability. Therefore, the gross profit margin is slightly lower than that of single parts. 4) Impact of RMB exchange rate appreciation.
Revenue accelerated from January to February of 22, and the performance slightly exceeded expectations. We expect the auto parts business to maintain a bright growth. According to the data of the passenger Association, China’s new energy vehicle market was booming from January to February, with output and sales of + 168.5% and + 153.1% year-on-year respectively. The company is expected to achieve rapid growth with the prosperity of downstream industries. In addition, as Dunan, the company’s main competitor in the valve market, is acquired by Gree, the supporting orders of other air conditioning and refrigeration customers may be greatly inclined to the company, further boosting the company’s market share in the refrigeration and air conditioning parts industry. From January to February, the company’s performance slightly exceeded expectations. Under the background of the rise of raw materials, the net profit attributable to the parent decreased year-on-year (10.56% in 21q1 and 9.48% in 22m1-m2), but the decline range has been gradually narrowed compared with the previous quarter (2.1pct in 21q3 and 1.4pct in 21q4), showing the company’s strong business toughness.
Investment suggestion: benefiting from the increased penetration of global new energy vehicles and the prominent value of thermal management, the company’s auto zero business may continue to maintain medium and high-speed growth. As a global leader in thermal management, Sanhua has been actively engaged in R & D, building solid technical barriers, and continuously strengthening its leading products, customers and scale advantages. Under the dual influence of high industry prosperity and high product quality, we continue to be optimistic about the leading position and growth of Sanhua in the field of thermal management. It is estimated that the net profit attributable to the parent company in 22-23 years will be 2.219 billion yuan and 2.800 billion yuan (the previous value is 2.421 billion yuan and 3.042 billion yuan), and the current stock price corresponds to 27.83x/22.06x PE in 22-23 years, maintaining the “buy” rating.
Risk warning: there may be differences between the performance express data and the financial data audited by the accounting firm; The operating data is preliminary accounting data, which is only phased financial data and is only for reference; The risk that the price of raw materials will continue to rise; The risk of overseas epidemic aggravation; Risk of lower than expected downstream sales.
