\u3000\u3 Shengda Resources Co.Ltd(000603) 303 Hengdian Group Tospo Lighting Co.Ltd(603303) )
Core view:
Event: Hengdian Group Tospo Lighting Co.Ltd(603303) released the annual report of 2021. In 2021, the company achieved an operating revenue of 5.273 billion yuan, a year-on-year increase of 16.98%; The net profit attributable to the parent company decreased by 2.84 billion yuan year-on-year. Excluding the impact of the merger and acquisition of Shanghai liangqin by splitting engineering plastics, the operating revenue of the company with the same caliber increased by 28.3% and the net profit increased by 10.5%.
The revenue increased rapidly and the vehicle business performed well. In 2021, the company’s operating revenue increased by 16.98% year-on-year, mainly due to the high growth of the company’s lighting application products and others. In 2021, the company’s lighting application products and other operating revenue was 4.858 billion yuan, with a year-on-year increase of 36.69%. We believe that there are two main reasons. 1) The sales of general lighting products of the company increased. During the reporting period, the sales volume of general lighting (self-made) and general lighting (purchased) of the company increased by 26.96% and 26.54% year-on-year. 2) The company’s vehicle business performed well.
In March 2021, the company acquired Shanghai liangqin and Wuhan liangxinpeng, providing new revenue points for the company’s vehicle business. During the reporting period, the revenue of the two companies was 927267 million yuan and 575826 million yuan respectively. In 2021, the vehicle business segment achieved an operating revenue of 281 million yuan, an increase of 191.53%. The revenue of lighting engineering construction and engineering plastics of the company was 275 million yuan and 132 million yuan respectively, with a year-on-year decrease of 19.97% and 77.87%. The main reason for the decrease of engineering plastics revenue was that the company stripped off the plastic business, and Debang plastics was no longer included in the scope of the company’s consolidated statements from April 1, 2021. In terms of regions, the company’s Chinese business revenue in 2021 was 1.157 billion yuan, a year-on-year decrease of 15.61%, and the foreign business revenue was 4.108 billion yuan, a year-on-year increase of 31.17%, of which the foreign revenue accounted for 77.91%, a significant increase compared with 69.48% in 2020.
The rising price of raw materials drives down the company’s gross profit margin. In 2021, the gross profit margin of the company’s sales was 13.75%, with a year-on-year decrease of 5.27 PCT. By product, the gross profit margin of the company’s lighting application, lighting engineering and engineering plastics business were 13.58%, 16.56% and 11.91% respectively, with a year-on-year decrease of 5.69, 2.36 and 5.41 PCT. We believe that the main reason for the decline in gross profit margin is the rise in the price of raw materials. In terms of period expenses, the company’s sales, management, finance and R & D expenses in 2021 increased by 3.91%, 17.54%, – 287.73% and – 6.13% year-on-year respectively, and the expense rates were 2.86%, 3.07%, – 0.77% and 2.89% respectively, with year-on-year changes of -0.36, 0.01, – 1.25 and -0.71pct. The financial expenses of the company decreased significantly in 2021, which was mainly due to the increase of interest income and exchange income of current deposits, including interest income of 487886 million yuan, a year-on-year increase of 200%; Exchange gains and losses were -5033300 yuan, compared with 36.097 million yuan in the same period last year. Overall, the company’s net interest rate was 6.22%, a year-on-year decrease of 1.4pct.
The company focuses on vehicle business. The global automotive controller and automotive lighting market has a large space, and the market scale is about 600 billion and 200 billion. The company has defined the vehicle business development strategy focusing on “vehicle controller + vehicle lighting”, and has established good cooperative relations with Panasonic, Huayu vision, Wanxiang, Zero run, Haila and Sanli. At present, the company’s existing fixed-point project of platform vehicle controller and vehicle lighting project are expected to accumulate orders of about 3 billion yuan, and the project cycle is 5-10 years. The end customers include many host brands such as Porsche, Audi, Volkswagen, Nissan, Dafa, Toyota and so on. The company’s R & D team in vehicle controller and vehicle lighting products has begun to take shape. At the same time, it is starting to establish Shanghai vehicle business R & D center. The subsequent company’s R & D capacity of vehicle business will continue to improve, so as to promote the improvement of competitiveness.
Investment suggestion: the company is a leading enterprise in general lighting. According to the strategic plan, the company will further focus on the main lighting industry and actively develop the vehicle lighting business. At present, the company’s vehicle business is progressing smoothly, which will promote the rapid growth of the company’s performance. It is estimated that the net profit attributable to the parent company from 2022 to 2023 will be 504 million and 691 million yuan, and the corresponding EPS will be 1.05 and 1.45 yuan, maintaining the “recommended” rating.
Risk warning: risk of raw material price change; Risk of exchange rate fluctuation; The risk of intensified market competition.
