\u3000\u3 Shengda Resources Co.Ltd(000603) 195 Gongniu Group Co.Ltd(603195) )
Event: the company released the 2021 annual performance express. In 2021, the company achieved an operating revenue of 12.42 billion yuan, a year-on-year increase of 23.6%; The net profit attributable to the parent company was 2.81 billion yuan, a year-on-year increase of 21.6%; Net profit deducted from non parent company was 2.67 billion yuan, with a year-on-year increase of 20.3%. In 2021q4, the company achieved an operating revenue of 3.41 billion yuan, a year-on-year increase of + 17.4%; The net profit attributable to the parent company was 610 million yuan, a year-on-year increase of – 15.1%.
Comments:
Revenue returns to the growth trend, and 21q4 profit is under pressure
In 2021, the company’s revenue increased by 23.6% year-on-year, 23.5pcts higher than that in 2020, and the two-year compound growth rate of revenue was 11.2%. On a quarterly basis, Q4’s revenue increased by + 17.4% year-on-year, 12.3pcts higher than Q3’s revenue growth year-on-year. Q4’s revenue slightly exceeded market expectations, mainly due to: 1) while the sales volume of the converter business increased, the price increase effect of the existing product 21q2 promoted the steady growth of the core business, while the unit price of the business is expected to increase slowly under the intelligent transformation; 2) The company’s wall switch business has gradually developed the sinking market. At the same time, new products such as Yuba, circuit breaker and intelligent door lock are introduced into the offline channels of wall switch business. At present, Yuba and other new products are in a period of rapid growth and may contribute to the increase of revenue in the future.
The net interest rate attributable to the parent company in Q4 was 17.8%, down 6.8pcts from the same period of last year. The company’s net profit attributable to the parent company in 19q4 and 20q4 remained above 20%, and the decline in 21q4 was mainly due to the share priority strategy (limited price increase) and the obvious rise in the price of raw materials. Looking forward to the future, the overall price rise trend of raw materials is slowing down. As of March 11, the average prices of copper and plastic, the main raw materials of 22q1 company, were + 9.1% and – 20.0% year-on-year respectively; In addition, the company’s leading position in the wall opening industry enables the company to maintain high bargaining power. At the same time, BBS lean management system has been implemented from the manufacturing end to the sales end, which helps the company to continuously improve the cost investment efficiency.
Closely follow the direction of innovation and reform and accelerate the layout of emerging businesses. In 2021, the company accelerated the layout of emerging businesses around the two tracks of new energy and intelligent ecology. In terms of new energy, the charging gun / pile may become the fulcrum for the company to cut into the fast-growing new energy track. In terms of intelligent ecology, the company closely follows the direction of innovation and Reform in the industry to launch intelligent ownerless lamps. The company plans to launch low-priced ownerless lamps for the mid-range market in the future, which is expected to further increase the revenue of LED sector.
Profit forecast, valuation and rating: Gongniu Group Co.Ltd(603195) focuses on the field of civil electrician and lighting, and constantly meets the changing needs of customers with the ultimate products and the concept of “professional focus, only the first, go a long way”. In view of the cost pressure faced by the company, we lowered the net profit attributable to the parent company from Gongniu Group Co.Ltd(603195) 2021 to 2023 to 2.81 billion yuan (down 7.3%), 3.24 billion yuan (down 4.5%) and 3.79 billion yuan (down 1.5%), corresponding to 29, 25 and 22 times of PE, maintaining the rating of “overweight”.
Risk tip: the price of raw materials has risen sharply, and the competition in the LED field is fierce.
