\u3000\u3 Shengda Resources Co.Ltd(000603) 303 Hengdian Group Tospo Lighting Co.Ltd(603303) )
Events
On March 10, 2022, the company disclosed its annual report for 2021. In 2021, the company realized an operating revenue of 5.273 billion yuan, a year-on-year increase of 16.98%, a net profit attributable to the parent company of 328 million yuan, a year-on-year decrease of 4.21%, and a net profit attributable to the parent company of 233 million yuan after deduction, a year-on-year decrease of 11.17%.
Dynamic information review
The annual revenue increased by 16.98%, and the new vehicle business increased by 192%. In 2021, the company achieved a revenue of 5.273 billion yuan, a year-on-year increase of 16.98%, and the net profit attributable to the parent company was 328 million yuan, a year-on-year decrease of 4.21%. The net profit attributable to the parent company after deduction was 233 million yuan, a year-on-year decrease of 11.17%, and the profit was lower than expected. Excluding the non economic impact of splitting the subsidiary engineering plastics (net profit of RMB 50 million in 2020) and the merger and acquisition of Shanghai liangqin and Wuhan liangxinpeng, the operating revenue of the company with the same caliber increased by 28.3% and the net profit increased by 10.5% year-on-year. In terms of business, the main business of general lighting achieved a revenue of 4.717 billion yuan, a year-on-year increase of 26.67%, and the vehicle business achieved a revenue of 281 million yuan, a year-on-year increase of 191.53%. The company’s traditional main business grew steadily throughout the year, and the new car loading business developed rapidly. In a single quarter, Q4 achieved a revenue of 1.566 billion yuan, a year-on-year increase of 24.28%, a month-on-month increase of 25.78%, a year-on-year decrease of 17.97%, a month-on-month decrease of 56.92%, and a non deduction of 22 million yuan, a month-on-month decrease of 31.31% and 73.64% respectively. The imbalance between shipping supply and demand affected the delivery of some products to Q4, dragging down the overall profit.
The rising prices of shipping and raw materials dragged down profitability. The company realized lean management and strengthened cost control. Affected by the substantial extension of shipping cycle and the continuous rise of raw material prices, the company’s annual gross profit margin was 13.75% in 2021, with a year-on-year increase of -5.27 PCT; The net interest rate was 6.22%, with a year-on-year increase of -1.40 PCT. Among them, the gross profit margin of Q4 was 10.82%, with a year-on-year ratio of -3.07 PCT and a month on month ratio of -4.43 PCT; The net interest rate was 2.89%, with a year-on-year ratio of -1.38 PCT and a month on month ratio of -5.24 PCT. In terms of expenses, on the one hand, the company gradually increases the price for the downstream, on the other hand, it implements lean management and strengthens expense control. In 2021, the annual expense rate of the company was 8.05%, with a year-on-year increase of -2.31 PCT. The rates of sales, management, R & D and financial expenses were 2.86%, 3.07%, 2.89% and – 0.77% respectively, with a year-on-year increase of -0.36, + 0.01, -0.71 and – 1.25 PCT respectively.
The on-board controller business has been comprehensively accelerated to overcome the technical problems of software and hardware. Under the transformation of intelligence and electrification, the automotive electronic and electrical architecture is moving from distributed to centralized. The global automotive controller market is about 600 billion yuan. The lack of overseas core accelerates the domestic substitution process of domestic suppliers, and high-quality independent manufacturers are expected to increase the global market share.
In 2021, the company defined the strategy of focusing on “vehicle controller + vehicle lighting”. The lamp controller (LDM) and battery management system (BMS) continued to break through Panasonic, Wanxiang 123 and other customers. The terminal is equipped with main engine plants such as Porsche, Audi, Volkswagen, Nissan, Dafa and Toyota, together with Panasonic, Huayu vision, Wanxiang, Zero run Haila has established a good cooperative relationship with Sanli and other companies. The company also established Debon intelligent control to strengthen software development, and plans to start the pre research of domain controller in 2022. The company’s orders in hand exceed 3 billion yuan, which will accelerate the growth of production capacity in the future.
Investment advice
The company is the leader of general lighting in China. The traditional main business is stable growth, and the new business “on-board controller + on-board lighting” has ushered in an outbreak period. Seizing the window period of intelligent vehicle transformation, the company has realized the matching of LDM and BMS to international top automobile enterprises, and strengthened the capacity-building of software and hardware and the research and development of domain controller. It is expected to usher in the double improvement of performance and valuation in the future. It is estimated that the net profit attributable to the parent company from 2022 to 2023 will be RMB 500 million and RMB 700 million respectively, and the corresponding PE of the current stock price will be 14x and 9x respectively, giving a “buy” rating.
Risk tips
1. Risk of price war in LED industry; 2. The landing risk of on-board projects and orders is lower than expected; 3. Risk of continuous core shortage in the industry.
