\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 660 Fuyao Glass Industry Group Co.Ltd(600660) )
Event overview
The company announced in its 2021 annual report that it achieved a revenue of 23.6 billion yuan in 2021, a year-on-year increase of 18.6%; The net profit attributable to the parent company was 3.15 billion yuan, a year-on-year increase of 21.0%; Net profit deducted from non parent company was 2.82 billion yuan, with a year-on-year increase of 22.2%. Among them, the revenue of 2021q4 was 6.45 billion yuan, a year-on-year increase of 5.2%, the net profit attributable to the parent was 550 million yuan, a year-on-year decrease of 37.3%, and the net profit not attributable to the parent was 440 million yuan, a year-on-year decrease of 44.9%. The performance of the profit end in a single quarter fluctuated greatly, mainly due to the adjustment of accounting standards.
Analysis and judgment:
The performance is relatively stable and the share continues to improve
The company’s revenue in 2021 was 23.6 billion yuan, a year-on-year increase of + 18.6%, compared with the global automobile production in the same period, a year-on-year increase of + 3.1%, of which the Chinese / overseas revenue was 12.19 billion yuan / 11.07 billion yuan, a year-on-year increase of + 14.4% / + 23.3%, significantly better than the industry average, mainly benefiting from the continuous increase of the company’s global share. Under the operating leverage effect, the growth rate of the profit side is greater than that of the income side. The total profit of the company in 2021 was 3.82 billion yuan, a year-on-year increase of + 22.8%, the total profit after deducting exchange gains and losses was + 23.1%, and the net profit attributable to the parent was 3.15 billion yuan, a year-on-year increase of + 21.0%. With the gradual mitigation of the impact of core shortage, the recovery of China’s wholesale sales combined with the repair of overseas demand, the company’s performance is expected to continue to improve, and the heavy asset attribute will have higher profit recovery flexibility.
The gross profit rate decreased slightly, and the freight + raw material price increased
Considering that the new accounting standards change the relevant freight from the original cost included in the current period to the operating cost & change the daily repair cost of fixed assets related to the production and processing of inventories from the original cost included in the current period to the principle of determining the cost of inventories, the adjusted gross profit margin in 2021 was 35.9%, with a year-on-year increase of -0.6pct, The year-on-year decline was mainly due to the increase in sea freight (a year-on-year increase of 230 million yuan, affecting the gross profit margin of -0.98 PCT) and soda ash price (a year-on-year increase of 110 million yuan, affecting the gross profit margin of -0.45 PCT), of which the gross profit margin of China / overseas was 43.0% / 27.0% respectively, with a year-on-year increase of + 1.4 PCT / – 2.7 PCT; In 2021, the adjusted sales expense increased from + 9.6% to 1.15 billion yuan year-on-year, and the corresponding sales expense ratio increased from – 0.4pct to 4.9% year-on-year; The adjusted administrative expenses increased by + 2.3% to 1.94 billion yuan year-on-year, and the corresponding administrative expense rate increased by – 1.3pct to 8.2% year-on-year.
In terms of other expenses, the financial expenses amounted to 690 million yuan, a year-on-year increase of 39.1%, and the corresponding financial expense rate was + 0.4pct to 2.9% year-on-year, mainly due to the increase of exchange losses caused by exchange rate fluctuations; R & D expenses increased by 22.2% year-on-year to 1 billion yuan, and the corresponding R & D expense rate increased by + 0.1pct to 4.2% year-on-year, mainly because the company continued to promote R & D innovation, driving the company’s technological upgrading and product added value. The net interest rate was 13.3%, year-on-year + 0.3pct.
Steam glass welcomes the second growth, integrates Sam and recreates a Fuyao
1) the auto glass business has benefited from the intelligent upgrading and the improvement of the penetration rate of ceiling glass, while the volume and price have increased simultaneously: at present, the company’s auto glass market share in China is more than 60%, and the global market share is more than 30%. Under the influence of the epidemic, the overseas market share has accelerated. The automobile intellectualization drives the improvement of automobile glass ASP. The company has carried out strategic cooperation with BOE and Beidou intelligent in the smart window and strengthened the layout. The revenue proportion of high value-added smart glass such as HUD glass, dimming glass and super insulating glass will continue to increase due to the increase of industry penetration (3.3pct year-on-year in 2021). At the same time, Tesla leads the trend of sky glass and accelerates the improvement of penetration. Sky glass significantly improves the glass area of single car, so as to improve the supporting value of single car; 2) Aluminum trim is expected to recreate a Fuyao: the company began to consolidate Sam in March 2019, and the integration work is progressing steadily. At present, it is still in a state of loss. It is expected that in 2022, with the completion of the integration of European factories and the breakthrough in China’s development, the profitability will be gradually improved. The aluminum trim strip can be integrated with steam glass to comply with the customer’s modular and integrated procurement trend. The medium and long-term integration of Sam is expected to rebuild a Fuyao.
Investment advice
Taking into account the impact of core shortage and rising prices of raw materials and the accelerated penetration of high value-added glass, adjust the profit forecast: it is estimated that the revenue from 2022 to 2023 will be adjusted from 27.02/30.32 billion yuan to 28.10/31.52 billion yuan, the net profit attributable to the parent company will be adjusted from 49.0/57.2 billion yuan to 4.60/5.65 billion yuan, and the EPS will be adjusted from 1.88/2.19 yuan to 1.76/2.17 yuan. It is estimated that the revenue and net profit attributable to the parent company will reach 36.25 billion yuan and 5.66 billion yuan respectively in 2024, and the EPS will be 258 yuan, The PE corresponding to the closing price of 37.93 yuan on March 17, 2022 is 22 / 18 / 15 times. In view of the fact that the company’s global layout has entered the harvest period, the global market share is expected to increase, the volume of high value-added automotive and glass products will be gradually increased, and the profitability of Sam will be gradually improved. The pe30 times in 2023 will be maintained, the target price will be adjusted from 65.7 yuan to 65.1 yuan, and the “buy” rating will be maintained.
Risk tips
Passenger car sales outside China were lower than expected; US factory earnings improved less than expected; Sam integration is progressing less than expected.
