\u3000\u3 China Vanke Co.Ltd(000002) 765 Landai Technology Group Corp.Ltd(002765) )
Event: the company released its 2021 annual report, and the company achieved an operating revenue of 3.14 billion yuan, a year-on-year increase of 30.3%; The net profit attributable to the parent company was 210 million yuan, a year-on-year increase of 3944.4%; The net profit after deducting non-profit was 120 million yuan, an increase of 515.2%; Earnings per share is 0.36 yuan.
Touch display and power transmission dual wheel drive boost high performance growth. The company’s touch display business reached a new high, with an annual operating revenue of 2.21 billion yuan, a year-on-year increase of 20.9%. Among the four business segments, cover glass, vehicle, industrial control and consumer products, except consumer products, other businesses developed well. Cover glass products are in short supply and will continue to expand the production capacity of 3D cover and large-size cover products; Focus on the development of vehicle touch screen series products, cooperate with many well-known vehicle screen supply enterprises in China, and vehicle display products have achieved mass production and sales; Promote the development of large-scale products and expand the company’s market space. The company’s power transmission business realized an operating revenue of 930 million yuan, a year-on-year increase of 60%, and the profit attributable to the parent company was 20.86 million yuan. With the recovery of vehicles and the rapid development of new energy vehicles, the company has ushered in new development opportunities, increased R & D, optimized customer structure and adjusted product structure, and achieved a significant increase in the production and sales of balance shaft assembly. A certain breakthrough has been made in the key layout of new energy reducer and new energy transmission system parts, and customers have covered well-known international customers such as electric power production, Geely virui, Byd Company Limited(002594) and so on, In the follow-up, the company will increase the capacity expansion in the field of automotive new energy, further explore the market and enhance its core competitiveness.
The profitability was improved and the cost was well controlled. In 2021, the company’s comprehensive gross profit margin was 18.2%, an increase of 5 percentage points over the previous year. The profitability of touch display business and power transmission business was significantly improved, mainly due to the increase in the proportion of high value-added new products, the improvement of product yield and efficiency, and the reduction of processing costs. During the period, the expense rate of the company was 10.1%, a year-on-year decrease of 2.6 percentage points, and the expense control was good. The return on net assets was 10.86%, and the operating efficiency was significantly improved.
The fixed size new energy auto parts and on-board industrial touch business may usher in a new growth curve. The company plans to raise no more than 600 million yuan through non-public offering, of which 373 million yuan will be raised for the manufacturing project of high-precision transmission gears and motor shafts of new energy vehicles, and 117 million yuan will be used for the production expansion of vehicle mounted and industrial touch screen cover glass. If the fixed value-added project is successfully put into operation, it may bring a new growth curve to the company.
Profit forecast and investment suggestions. It is expected that the compound growth rate of net profit attributable to the parent company in the next three years will be 31%. The company’s touch display developed in coordination with the dual main business of power transmission and improved its profitability. Combined with the company’s performance growth, it was given 21 times PE in 2022 and the target price was 10.92 yuan, which was raised to the “buy” rating.
Risk tip: the price of raw materials may fluctuate sharply, the market expansion may be less than expected, and the capacity expansion may be less than expected.
