\u3000\u3 Shengda Resources Co.Ltd(000603) 678 Fujian Torch Electron Technology Co.Ltd(603678) )
Event: the company released its 2021 annual report on March 22, with annual revenue of 4.73 billion yuan, yoy + 29.5%; Net profit attributable to parent company: 960 million yuan, yoy + 56.8%; Deduct non net profit of 950 million yuan, yoy + 61.9%. The overall performance is in line with expectations and is basically within the scope of performance forecast.
The quarterly revenue was relatively balanced, and the net profit of 4q21 decreased year-on-year. From 2021q1 to Q4, the company achieved revenue of 1.15 billion yuan, 1.26 billion yuan, 1.18 billion yuan and 1.14 billion yuan respectively, yoy + 90.7%, + 40.8%, + 21.4% and – 3.8%; Net profit attributable to parent company: 260 million yuan, 290 million yuan, 230 million yuan, 170 million yuan, yoy + 276.7%, + 42.0%, + 53.3%, – 5.5%. 2021q1 ~ Q4 gross profit margins are 35.0%, 37.7%, 35.3% and 33.9% respectively; The net interest rates were 22.6%, 24.1%, 20.3% and 15.2% respectively. The decrease of 4q21 net interest rate was mainly due to the increase of expenses.
The overall cost control ability was improved, and the sales collection improved the operating cash flow. 1) The management fee rate was 4.0%, with a year-on-year decrease of 0.04ppt; 2) The sales expense ratio was 3.1%, with a year-on-year decrease of 0.17ppt; 3) The R & D cost is 110 million yuan, yoy + 58.1%; 4) In 2021, the company donated 15.86 million yuan and amortized 11.58 million yuan of equity incentive expenses, partially affecting profits. By the end of 2021, the company’s 5) prepayment was RMB 90 million, an increase of 670% over the beginning of the year, which was due to the increase of prepayment for trade business; 6) The net cash flow from operating activities was 590 million yuan, yoy + 2237%, which was due to sales receipts.
The capacitor business continues to be booming, and the new material casting has the second growth curve. 1) Self produced components: the revenue was 1.52 billion yuan, yoy + 43.0%, accounting for 32.2% of the total revenue, and the gross profit margin increased by 7.5ppt to 78.0% year-on-year. Among them, the income of Guangzhou Tianji is 170 million; Profit 58.19 million, yoy + 45%. 2) New materials sector: the revenue was 66 million yuan, yoy + 34.8%, and the gross profit margin increased by 3.9ppt to 74.4% year-on-year. Among them, Liya new material was rated as the third batch of specialized and special new “little giant” enterprises in the country, with an income of 120 million; Profit 41.05 million, yoy + 27%; Liya chemical was listed as a provincial science and technology giant enterprise in 2021, and its performance turned losses into profits. 3) Trade sector: the revenue was 3.06 billion yuan, yoy + 23.9%, and the gross profit margin decreased by 1.0ppt to 12.9% year-on-year. The company’s new material sector has formed a stable supply capacity. The annual output of ceramic precursor is 31.2 tons, yoy + 80%; Sales volume: 7.4 tons, yoy + 436%; Inventory 21.5 tons, yoy + 118%. The production, sales and inventory of the company’s ceramic precursors increased significantly, which may reflect the future growth potential of the sector.
Investment suggestion: the growth of special MLCC, the company’s core business, has a good sustainability, and there are sufficient orders on hand. With the improvement of equipment informatization and the acceleration of localization process, The industry and the main business of the company are expected to be in the “14th five year plan” “The boom continues during this period. At the same time, the company’s proprietary technology for the industrialization of high-performance special ceramic materials is the first in China, which has high barriers and strong competitiveness, and has broad prospects for development. We expect the net profit attributable to the parent company from 2022 to 2024 to be 1.301 billion yuan, 1.617 billion yuan and 1.945 billion yuan respectively. The current share price corresponds to PE of 19x / 15x / 13X from 2022 to 2024. We take into account the continuous high boom of downstream industries and the core owners of the company For the competitiveness of the industry, the company will be given 25 times PE in 2022, and the EPS in 2022 will be 2.83 yuan / share, corresponding to the target price of 70.71 yuan. Maintain a “recommended” rating.
Risk tip: the growth rate of downstream demand slows down, the capacity expansion is less than expected, and the gross profit margin decreases
