\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 435 North Navigation Control Technology Co.Ltd(600435) )
Event: North Navigation Control Technology Co.Ltd(600435) released the 2021 annual report, and achieved an operating revenue of 3.992 billion yuan in 2021, a year-on-year increase of + 32.8%; The net profit attributable to the parent company was 134 million yuan, a year-on-year increase of + 113.7%; Deducting the net profit not attributable to the parent company of 124 million yuan, a year-on-year increase of + 472.5%. Operating revenue, total profit and net profit maintained year-on-year growth, exceeding the target and reaching a record high. The company’s business goal in 2022 is to achieve an operating revenue of more than 4 billion yuan and a total profit of more than 200 million yuan.
The company achieved the target of RMB 13.47 billion in total revenue and 13.8 billion in excess profit, achieving a high operating profit rate of 3.52% compared with the target of RMB 13.7 billion in 2027. Among them, Q4 achieved a revenue of 1.61 billion yuan, a slight decrease of 3.72% year-on-year; The net profit was 48.07 million yuan, a year-on-year increase of – 15.6%, mainly due to the impact of asset disposal income in 2020.
The gross profit margin decreased slightly, and the expenses during the period were well controlled: the overall gross profit margin of the company in 2021 was 20.7%, down 0.74 percentage points from 2020; The gross profit margin of the core main business “navigation control and ammunition informatization” was 21.6%, down 0.96 percentage points from 2020. Significant results were achieved in improving quality and efficiency. The cost rates of sales, management and finance were 2.3%, 6.9% and – 0.4% respectively, down 0.3%, 0.8 and 0.3 percentage points respectively compared with 2020, realizing high-quality development. Systematically improve the ability of scientific and technological innovation and continue to increase R & D investment. In 2021, the R & D investment was 214 million yuan, a year-on-year increase of + 31.1%, accounting for 5.36% of the total revenue.
Navigation control leader and platform force of subsidiary: the company is in a leading position in China in the fields of guidance control, navigation control, detection control, environmental control and stability control. In 2021, the parent company achieved a revenue of RMB 2.596 billion, a year-on-year increase of + 38.4%, and a net profit of RMB 115 million, a year-on-year increase of + 417%. At the same time, the main holding subsidiaries have achieved good performance. Hengyang photoelectric achieved a revenue of 160 million yuan, a year-on-year increase of + 35.1%, and a net profit of 21.42 million yuan, a year-on-year increase of + 21.4%. Zhongbing communication achieved a revenue of 627 million yuan, a year-on-year increase of + 5.99%, and a net profit of 104 million yuan. Zhongbing aviation union achieved a revenue of 366 million yuan, a year-on-year increase of + 15.33%, and a net profit of 50.07 million yuan, a year-on-year increase of + 16.77%.
Transfer of North Special Purpose Vehicle and focus on the core business: the company previously announced that it plans to transfer 100% equity of Harbin Jiancheng North Special Purpose Vehicle Co., Ltd. (“North Special Purpose Vehicle”), a wholly-owned subsidiary of the company, to China Ordnance Industry Group Aviation Ammunition Research Institute Co., Ltd. (“Aviation Ammunition Institute”) and North Navigation Control Technology Co.Ltd(600435) Technology Group Co., Ltd. (“navigation group”) respectively. The operation of special purpose vehicles in the North has been difficult in recent years, and a large loss began to appear in 2019, with a loss of 25.25 million yuan in 2021. After this transaction, the company and its holding subsidiaries will no longer hold the equity of special vehicles in the north, and the proportion of equity held by zhongbing aviation Union will be increased from 43.06% to 51.95%. It will help the company strengthen its core business capabilities and improve asset quality, and its profitability is expected to be further improved in the future.
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 190 / 270 / 370 million respectively, and the corresponding PE of the current stock price is 71 / 51 / 37 times. For the first time, give a “overweight” rating.
Risk warning: the epidemic affects the macro economy and leads to the risk that the downstream demand growth is less than expected; Risk of price fluctuation of raw materials; The risk of tax policy adjustment and change.
