\u3000\u3 Guocheng Mining Co.Ltd(000688) 301 Iray Technology Company Limited(688301) )
In 2021, the annual revenue increased, and the profit side slightly exceeded expectations
2021 annual report: in 2021, the company realized an operating revenue of 1.187 billion yuan (YoY 51.43%), a net profit attributable to the parent company of 484 million yuan (YoY 117.79%), deducting a net profit not attributable to the parent company of 342 million yuan (YoY 72.29%), including a static product revenue of 749 million yuan, a year-on-year increase of 24.59%; Dynamic products grew rapidly due to the release of orders from new dental and industrial customers, with a revenue of 377 million yuan, a year-on-year increase of 171.95%.
2021q4: the company’s revenue is 364 million yuan (yoy58.21%), the net profit attributable to the parent company is 158 million yuan (yoy137.82%), and the net profit not attributable to the parent company is 73 million yuan (yoy33.14%).
The net profit attributable to the parent company in 2021 slightly exceeded our previous prediction, which is mainly related to government subsidies and the positive recognition of investment income and fair value. The annual report shows that the amount of non recurring profits and losses of the company in 2021 is 142 million (yoy496.27%), including 46 million government subsidies and 114 million positive investment income and fair value.
The scale effect is prominent, and the cost rate during the period is at a new low
The scale effect has gradually become prominent, superimposed on the rapid growth of the revenue side, and the company’s period expense rate has continued to decrease since 2018. In 2021, the company’s period expense rate was 20.5%, a year-on-year decrease of 2.1pct. If the impact of 14.27 million equity incentive payment expenses is not considered, the company’s period expense rate was 19.3%, a year-on-year decrease of 3.3pct, another record low. We believe that with the increasing proportion of the company’s high gross margin products and the cost advantage brought by the scale effect, the company’s market competitive position will be further improved.
Inventory and contract liabilities show that the company’s orders are booming, and the supply chain continues to be optimized to ensure sufficient production capacity
Inventory: at the end of 2021, the company’s inventory was 330 million, with a year-on-year increase of 90.5%, mainly due to the expansion of the company’s business scale and the increase of orders on hand from newly signed major customers in dental and industrial fields, resulting in the increase of raw material preparation. close
Same liabilities: at the end of 2021, the company’s contract liabilities reached 80 million, an increase of 374.1% year-on-year over the beginning of the year. As the company’s digital X-ray detector adopts the sales mode of “production based on sales”, we believe that the significant increase in inventory and contract liabilities verifies the high prospect of the company’s orders.
Sufficient capacity: the company accelerated the automation transformation in Taicang production base, greatly improved the flexible production capacity of the production line, and achieved stable delivery exceeding expectations throughout the year (production and sales increased by 147% and 146% year-on-year). In addition, Haining base has realized the first batch of equipment entering the plant at the end of 2021 and started the trial production of cesium iodide evaporation production line. We believe that with the gradual production of Haining base, the company’s production capacity may double. In addition, the automation degree and scale effect of the company’s product line will be more prominent.
The expansion of new customers in dental and industrial fields has become an important support for the rapid growth of the company’s revenue.
In 2021, the company actively expanded the subdivided fields of Dentistry and industry, and successfully introduced new key customers of dental CBCT and industrial power battery testing. Among them, the sales revenue of dentistry exceeded 200 million (an increase of about 300% compared with the same period in 2020), the industrial sales revenue exceeded 150 million (an increase of 150% compared with the same period in 2020), and the proportion of Dentistry and industry in the total revenue increased from 14% in 2020 to about 30%. In addition, dental and industrial products with high gross profit margin also boosted the overall gross profit margin of the company by 3.45 PCT. We believe that the company’s product quality, supply chain stability and comprehensive technology accumulation have built the company’s core competitiveness, which has been fully verified and affirmed in the process of new customer expansion. As the company’s newly signed large customer orders in 2021 are still in the early stage of small batch delivery, it is expected to usher in a rapid order release in 2022. With the continuous expansion of the company in the fields of security and electronic testing, the rapid growth of performance in dental and industrial fields may continue.
Profit forecast and valuation
Based on the analysis of the company’s core business, we predict that from 2022 to 2024, we will achieve operating revenue of RMB 1.694 billion, 2.296 billion and 3.005 billion, with a year-on-year increase of 42.6%, 35.6% and 30.9%, and realize net profit attributable to the parent company of RMB 577 million, 798 million and 1.062 billion, with a year-on-year increase of 19.2%, 38.4% and 33.0%, corresponding to EPS of RMB 7.95, 11.01 and 14.64 per share. The current share price corresponds to PE of 49, 36 and 27 times. Considering the layout rhythm of the company in the field of Dentistry and industrial security and the upcoming release of the production capacity of Haining factory, the company’s revenue will still maintain a high growth rate and maintain the “overweight” rating.
Risk tips
The volatility of the impact of equity incentive on apparent performance, the risk of decline in gross profit margin, the risk that the sales of new products are less than expected, the risk of raw material supply, exchange risk, etc.
