\u3000\u3 Bohai Water Industry Co.Ltd(000605) 111 Wuxi Nce Power Co.Ltd(605111) )
Matters:
The company released its annual report for 2021. In 2021, the company achieved a revenue of 1.498 billion yuan, a year-on-year increase of 56.89%; The net profit attributable to shareholders of listed companies was 410 million yuan, a year-on-year increase of 194.55%. The company plans to distribute a cash dividend of 5.75 yuan (including tax) to all shareholders for every 10 shares; It is proposed to increase 4 shares for every 10 shares to all shareholders with capital reserve.
Ping An View:
The product structure was adjusted and optimized, and the profitability increased significantly: in 2021, the company achieved a revenue of 1.498 billion yuan (56.89% YoY), and the net profit attributable to the shareholders of the listed company was 410 million yuan (194.55% YoY). In 2021, the overall gross profit margin and net profit margin of the company were 39.12% (+ 13.75pct YoY) and 27.40% (+ 12.81pct YoY) respectively, and the weighted average return on net assets was 30.62% (+ 12.13pctyoy). Thanks to the short supply of products and the adjustment and optimization of product structure, the gross profit margin and return on net assets have risen sharply. In terms of revenue structure, the proportion of grooved power MOSFET was adjusted from 55.79% in the same period of last year to 45.31% in the current period; Shielded gate power MOSFET increased from 31.69% to 38.96%; As the company’s current fast and large-scale product, the sales proportion of IGBT has increased from 1.34% to 5.39%. In terms of product appearance, the sales proportion of chip products decreased from 18.39% to 9.53%. From the expense side, the company’s sales expense rate, management expense rate, financial expense rate and R & D expense rate in 2021 are 1.39% (-0.06pct YoY), 2.06% (-0.46pctyoy), – 1.16% (-0.52pct YoY) and 5.32% (-0.1pct YoY) respectively. The expense rate is relatively stable and the cost control is relatively good. The net cash flow from the company’s operating activities reached 451 million (458.99% YoY), and the cash flow capacity was significantly improved.
Power device design leader, significantly benefiting from the industry boom cycle and domestic substitution wave: the company’s main product types include grooved power MOSFET, super junction power MOSFET, shielded gate power MOSFET and IGBT. The product voltage has covered a full range of products ranging from 12V to 1700V, which are widely used in consumer electronics, automotive electronics, industrial electronics, new energy vehicles / charging piles, intelligent equipment manufacturing, Internet of things, 5g Photovoltaic new energy and other fields have many well-known customers in various application fields of downstream industries. Since 2021, due to the rise of emerging application fields such as automotive electronics, photovoltaic inverter and photovoltaic energy storage, as well as the accelerated localization process of the company’s industry segments, the prosperity of the industry has continued to rise, and the supply of products is in short supply. The company actively optimizes the market structure, customer structure and product structure, develops emerging markets and key customers, rapidly improves the sales scale and proportion of shielded grid power MOSFET, IGBT and other products, and actively develops medium and high-end industries such as automotive electronics (including fuel vehicles and new energy vehicles), photovoltaic inverter and photovoltaic energy storage, 5g base station power supply, industrial automation, high-end electric tools and so on. Especially in the automotive electronics market, mass supply of more than a dozen products has been realized. At the same time, the company’s products have also entered the whole machine parts factories of multiple automotive brands, and the overall sales proportion of automotive electronics products has been rapidly increased. In addition, the company’s 12 inch 1200V high-frequency low saturation voltage drop IGBT products have been stably mass produced. The products are applied in the photovoltaic inverter industry. At present, they have been applied in large quantities in a number of typical customers in the industry. In 2021, IGBT has achieved sales of 805144 million yuan, an increase of 529.44% compared with the same period last year.
Investment suggestion: the company is a leading power device design enterprise in China. It has a perfect layout in high-end power devices, increasingly rich product series and models, and continues to explore emerging markets and key customers. With its advantages, the company will still fully benefit from the dual opportunities of high industry prosperity and domestic substitution, and its business will grow better. Based on the latest financial report of the company and the judgment on the strategic layout of the industry, we slightly adjusted the profit expectation of the company. It is estimated that the net profit of the company from 2022 to 2024 will be 508 million yuan (the former value is 510 million yuan), 632 million yuan (the former value is 629 million yuan) and 758 million yuan (New), respectively. The EPS will be 355 yuan, 442 yuan and 531 yuan respectively, corresponding to 54.1x, 43.4x and 36.2x PE on March 21, Maintain the company’s “recommended” rating.
Risk tips: (1) downside risk of industry prosperity: the company’s performance is closely related to the prosperity of semiconductor power discrete device industry, so it will be affected by macroeconomic fluctuations. If the macroeconomic downturn or downstream demand is less than expected, the company’s revenue and profit growth may be adversely affected; (2) Risk of intensified market competition: MOSFET and IGBT are power semiconductor devices with high technical threshold, which have high requirements for R & D technology, product quality and service. Once the company’s technical level, the speed of product renewal and iteration, and the quality of products and services are reduced, they may be robbed of market share by competitors; (3) Risk of insufficient production capacity: at present, the company still focuses on fabless mode, and the iteration speed of product R & D and design is fast. However, if the production capacity of the company’s main suppliers is seriously strained or the relationship between the two sides deteriorates, the company’s supply and customer expansion may be affected, and the performance may be adversely affected.
