\u3000\u3 Guocheng Mining Co.Ltd(000688) 589 Leaguer (Shenzhen) Microelectronics Corp(688589) )
Event: the company released its annual report for 2021. The annual revenue was 360 million yuan, a year-on-year increase of 67%, and the net profit attributable to the parent company was 40 million yuan, a year-on-year increase of 51%. Among them, Q4 achieved a revenue of 160 million yuan in a single quarter, with a year-on-year increase of 131%. The net profit attributable to the parent company was 20 million yuan, with a year-on-year increase of 25%. The revenue in a single quarter reached a record high.
The sales scale is gradually huge, and the categories are increasingly rich. Breakthroughs have been made in multiple markets, opening up a new blue ocean. In 2021, the company’s smart grid business achieved revenue of 310 million yuan (year-on-year + 53.7%), and the non power Internet of things business achieved revenue of 50 million yuan (year-on-year + 246.4%). The high growth of the company’s performance was mainly due to the active development of the application of chip technology and products in various markets in this year. In 2021, the company’s comprehensive gross profit margin was 41.4%, including 43% in the power grid market and 32.4% in the non power Internet of things market. In terms of expense rate, the year-on-year decrease was obvious. The sales expense rate was 9.1% (year-on-year – 2.6pp), the management expense rate was 5.6% (year-on-year – 3.3pp), the financial expense rate was – 0.1% (year-on-year + 0.6%), and the R & D expense was 60 million yuan, with a year-on-year increase of 22.6%. We continued to increase investment in chip R & D and consolidate our core competitiveness.
New products are introduced to enhance the competitiveness of consumer IOT, and plbus creates the commanding height of plciot industry. In 2021, the company launched a number of new products to the market: 1) in terms of chips, the company developed broadband plcsoc chips with higher integration and smaller volume from the original broadband PLC chips below 12Mhz of power line to meet the secondary development needs of more complex applications. In addition, the company successfully launched MCU chip products in the second half of 2021; 2) In terms of modules, relevant modules are synchronously developed and promoted based on broadband PLC chip; 3) In terms of terminal and system platform, we have developed intelligent integrated terminal and unattended substation system integrating distribution network and marketing; 4) In the field of high-speed railway, in addition to the original high-speed railway power management system, enter the fields of high-speed railway intelligent tunnel lighting and station building intelligent power management to enrich the high-speed railway business sector; 5) In the photovoltaic field, promote the on-site pilot operation of a complete solution for photovoltaic power generation monitoring based on PLC technology, and help the digital upgrading of photovoltaic energy system.
The smooth development of the power grid market has contributed to the growth point of performance, and the concentrator terminal has made significant progress in winning the bid. The power grid market is the company’s traditional business field, with the largest contribution to performance and sustained and stable growth. The company actively explored the application market of HPLC module in intelligent electrical equipment. The State Grid concentrator terminal developed by the company also won the bid in the unified public bidding of State Grid concentrator terminal in 2021. PA chip has made great progress in external sales or cooperation, bringing new performance growth points. In terms of overseas meter reading market, the PLC chip of the company meets the international standard ieee1901 1. It has been successfully piloted in three countries and is expected to make a breakthrough in the overseas meter reading market in 2022.
Profit forecast and investment suggestions. It is estimated that the company’s EPS from 2022 to 2024 will be 1.08 yuan, 2.19 yuan and 2.63 yuan respectively, and the corresponding PE will be 44 times, 21 times and 18 times respectively, maintaining the “buy” rating.
Risk tips: periodic fluctuation risk of power grid procurement demand, fluctuation risk of raw material and OEM price, risk of international political and trade changes, covid-19 epidemic impact risk, etc.
