\u3000\u3 Guocheng Mining Co.Ltd(000688) 776 Guoguang Electric Co.Ltd.Chengdu(688776) )
Event: the company released its annual report for 2021, and achieved annual revenue of 590 million yuan, a year-on-year increase of 32.41%; The net profit attributable to the parent company was 165 million yuan, a year-on-year increase of 72.8%.
The annual performance increased by 72.8% and the profitability improved. In 2021, the company achieved a revenue of 590 million yuan, a year-on-year increase of 32.41%; The net profit attributable to the parent company was 165 million yuan, a year-on-year increase of 72.8%. In a single quarter, Q4 achieved a revenue of 201 million yuan, a year-on-year increase of 48.2%; The net profit attributable to the parent company was 54 million yuan, a year-on-year increase of 36.2%. The company’s expense rate during the period was 16.81%, a decrease of 2.70pct compared with the same period last year. In terms of profit margin, the gross profit margin was 49.79%, with a year-on-year increase of 1.78 PCT, and the gross profit margin of microwave business and nuclear industry increased year-on-year; Roe was 17.6%, a year-on-year decrease of 0.28pct, mainly due to the decline of debt ratio and asset turnover rate.
At the end of the balance sheet, the inventory was 195 million yuan, an increase of 19% over the beginning of the period, including raw materials + 18%, products in process + 52.5% and self-made semi-finished products + 19%. It can be inferred that the company has sufficient orders and production scheduling at present. At the end of the cash flow statement, the net operating cash flow was 52 million yuan, a year-on-year increase of 38%, and the operating capacity was improved.
The core supplier of vacuum devices and the rapid development of microwave business
The company’s microwave device business mainly includes vacuum devices and solid-state devices. It is the core of military equipment systems such as phased array radar, microwave communication and electronic countermeasure. China’s vacuum devices show a competitive pattern of “two factories and two institutes”. The company’s electric vacuum products such as continuous wave traveling wave tube and magnetron occupy an important position in the industry. In 2021, microwave business revenue was 397 million yuan, a year-on-year increase of 20.77%; The gross profit margin was 60.27%, with a year-on-year increase of 5.87pct. The microwave business of the company is vacuum + solid-state dual wheel drive. With the continuous development of digital array radar and LEO satellites, the microwave business may continue the rapid growth trend.
There is a strong demand for domestic substitutes in the field of nuclear industry, and ITER projects are in hand with full orders
The company’s nuclear business mainly includes the core components of controllable nuclear fusion device, divertor, first wall, etc., and nuclear industry pumps and valves. In 2021, the nuclear business achieved a revenue of 131 million yuan, a year-on-year increase of 90.11%; The gross profit margin was 36.49%, with a year-on-year increase of 1.68pct. At present, China’s nuclear industry urgently needs to carry out independent innovation and localization of key parts. The radiation resistant small valve project undertaken by the Ministry of science and technology has been developed and delivered in small quantities. With the gradual release of the production capacity of IPO funded projects, or the continuous thickening of the company’s performance. In addition, the ITER project is expected to bring 1 billion yuan of revenue to the company 23 years ago. In addition to the ITER project, China’s HL-2M and other controllable nuclear fusion projects also purchase core components from the company. With the continuous maturity of controllable nuclear fusion project technology, the demand for core components is expected to continue to increase.
Profit forecast: the company is deeply engaged in the field of microwave devices, forming a two wheel drive of vacuum devices and solid-state devices, especially in the field of vacuum devices. With the promotion of electronic countermeasures and the construction of LEO satellites, the microwave device business is expected to develop continuously. Secondly, there is a strong demand for national product substitution in the field of nuclear industry, the promotion of ITER project and relevant projects in China, the new expansion of the field of nuclear industry or the maintenance of long-term high growth rate, Optimistic about the sustainable development ability of the company. To sum up, we predict that the operating revenue in 202224 will be 975 / 1846 / 2606 million yuan, the net profit attributable to the parent company will be 280 / 450 / 685 million yuan, the corresponding EPS will be 3.61 / 5.81 / 8.84 yuan, and the corresponding PE will be 39.74/24.71/16.23x, maintaining the “buy” rating.
Risk tips: risks with high customer concentration; New product R & D risk; Risk of mass production of first wall (FW) and nuclear pump products; Technology upgrading and substitution risk
