\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 882 Ningbo Haitian Precision Machinery Co.Ltd(601882) )
Event overview: the company released the annual report of 2021. During the reporting period, the company achieved a revenue of 2.73 billion yuan, a year-on-year increase of 27.3%; The net profit attributable to the parent company was 371 million yuan, a year-on-year increase of 168.46%. From the single quarter of Q4, the company achieved a revenue of 722 million yuan in 2021q4, a year-on-year increase of 37.34% and a month on month decrease of 2.52%; The net profit attributable to the parent company was 108 million yuan, with a year-on-year increase of 122.51% and a month on month increase of 4.08%.
Many factors promote strong downstream demand, and the company has abundant orders on hand. In 2021, as China gradually recovers from the epidemic and superimposes the influencing factors of overseas epidemic, the domestic substitution of machine tool industry will be promoted rapidly; The accelerated upgrading of manufacturing industry, combined with the growth of equipment renewal demand in downstream industries and other factors, promotes the strong demand for machine tool products in downstream industries and drives the rapid growth of company orders. In terms of orders, by the end of 2021, the total contract liabilities of the company were 856 million yuan, a year-on-year increase of 36.31%; The inventory was 1.278 billion yuan, with a year-on-year increase of 64.69%, reflecting the rapid growth of the company’s orders.
Multi product layout promotes performance growth, and scale effect promotes profitability. In recent years, the company has continuously promoted the strategic transformation of products and paid attention to the common development of diversified products. At present, it has achieved remarkable results. Among them, the sales effect of CNC vertical machining center products and CNC horizontal machining center is the most obvious. In 2019, the operating revenue of CNC vertical machining center products was only 145 million yuan and 712 million yuan by 2021, with an annual compound growth rate of 121.58%; The revenue of CNC horizontal machining center products was 181 million yuan in 2020 and 439 million yuan in 2021, with a year-on-year increase of 142.54%, which made a significant contribution to the growth of performance. With the booming production and marketing of the company’s products, the scale effect is prominent, which drives the improvement of profitability. In the context of the sharp rise in the price of upstream raw materials, the gross profit margin of the company’s CNC gantry machining center, CNC horizontal machining center and other main business products increased by 1.06%, 2.08% and 4% year-on-year respectively in 2021, reaching 30.03%, 36.12% and 13.34%. In 2021, the company’s sales expense rate, management expense rate and financial expense rate were 5.19%, 5.34% and – 0.16% respectively, which were 0.84pct, 1.05 and 0.41pct lower than that in 2020; The net interest rate of the company is 13.59% higher than that of 2021.
The progress of domestic substitution is accelerated, and the company has obvious competitive advantages. The repeated overseas epidemic has accelerated the process of domestic substitution in the machine tool industry. The company’s products are positioned as high-end CNC machine tools with high technical content and high added value. The main competitors are overseas mature machine tool manufacturers in Taiwan, South Korea, Japan and other places. In this field, market competition mainly depends on product performance, reliability and service. The company is expected to seize the market opportunity and take the lead in realizing the breakthrough of domestic substitution in the field of machine tools with comprehensive product layout, good cost performance and high-quality service.
Investment suggestion: as a leading enterprise in the field of medium and high-end CNC machine tools in China, the company benefits from the rising demand of downstream industries and the accelerating replacement process of domestic machine tools, and its performance is expected to continue to improve. We expect the company to achieve a revenue of RMB 3.425/42.51/5.280 billion from 2022 to 2024, and the net profit attributable to the parent company is RMB 439610/803 million respectively. The corresponding PE of the current stock price is 24 / 17 / 13 times respectively, maintaining the “recommended” rating.
Risk tips: business risks arising from the economic cycle, intensified market competition, lower downstream demand than expected, etc.
