\u3000\u3 China Vanke Co.Ltd(000002) 139 Shenzhen Topband Co.Ltd(002139) )
Event: the company released its 2021 annual report and achieved a revenue of 7.767 billion yuan, a year-on-year increase of 39.7%. The net profit attributable to the parent company was 565 million yuan, a year-on-year increase of 6.2%. Profit pressure is mainly due to the increase in the price of raw materials, the increase in expenses caused by increased investment, and the provision for credit impairment. The company plans to buy back 40-60 million yuan of shares for equity incentive or employee stock ownership plan, and plans to spin off research control automation for listing.
Revenue exceeded expectations, focusing on the continued high-quality growth of head customers. The company's revenue growth exceeded expectations, which mainly depends on the sustainable development of the core business sector: the revenue of the electric tool sector reached 2.994 billion yuan, a year-on-year increase of 43.4%, which has become the largest business sector of the company. The company's focus on head customers and category expansion strategy has been effective, and the market share has continued to increase; The income of the household appliance sector was 2.959 billion yuan, a year-on-year increase of 37.4%, significantly higher than the average growth rate of the household appliance industry, mainly due to the continuous expansion of customers and the increase of share; The new energy sector achieved a revenue of 1.241 billion yuan, a year-on-year increase of 38.9%. Energy storage and green travel are growing rapidly, and are expected to become the core driver of the company's growth in the future.
The short-term pressure on profits has a comprehensive impact on raw materials, expenses and impairment provision. In 2021, affected by the price rise of raw materials in the upstream, the company's gross profit margin decreased by 3.11 percentage points to 21.28%, including 22.43% (- 4.99pp), 19.55% (- 1.93pp) in the household appliance sector and 21.73% (- 1.44pp) in the new energy sector. We judge that with the easing of the price rise trend of raw materials, the superimposed cost will gradually transmit to the downstream, and the impact will slow down. On the expense side, facing the great opportunity of the industry, the company increased investment, increased the R & D, management and sales rates, and prudently accrued about 70 million credit impairment for individual customers. All factors together had an impact on the company's current performance.
Based on the core technology "four electricity and one network", we have continued to grow with high quality despite the wind and waves. The company has grasped the industry opportunities through accumulation, and achieved high-speed and high-quality growth in the past 2-3 years. At present, the trend of the eastward movement of the global intelligent controller industry has been determined. Based on the core "four electricity and one network" technology, the company continues to break through important customers at home and abroad, the share continues to increase, the products continue to expand, and the industry reputation is outstanding. Based on the deep understanding and judgment of the industry, the company continues to incubate products and markets in emerging fields such as new energy vehicles and energy storage, and launch industry-leading solutions. Under the background of all things Zhilian, the company, as the industry leader, will fully share the high climate dividend of trillion Internet of things industry. Although the short-term performance is disturbed, the long-term trend remains unchanged.
Investment suggestion: the era of Internet of all things has come, and the intelligent controller industry is still in the stage of accelerated technology upgrading and rapid market growth. As the leader of the industry, the company will continue to enjoy the rapid development of the industry, and the short-term performance fluctuation will not change the long-term trend. We expect that the company's revenue from 2022 to 2024 will be RMB 98.3/122.6/15.14 billion respectively, and the net profit attributable to the parent company will be RMB 76/11.1/1.4 billion respectively, with the corresponding EPS of RMB 0.61/0.88/1.12 respectively, maintaining the "buy" rating.
Risk tips: (1) the price of raw materials fluctuates violently; (2) Downstream demand is lower than expected; (3) The progress of capacity expansion is less than expected; (4) Overseas business expansion risk and exchange rate fluctuation risk
