\u3000\u3 China Vanke Co.Ltd(000002) 050 Zhejiang Sanhua Intelligent Controls Co.Ltd(002050) )
Report guide
The company released its 2021 annual report. In 2021, the company realized an operating revenue of 16.021 billion yuan, a year-on-year increase of + 32.30%; The net profit attributable to the parent company was 1.684 billion yuan, a year-on-year increase of + 15.18%. Among them, Q4 achieved an operating revenue of 4.301 billion yuan, a year-on-year increase of + 22.30%; The net profit attributable to the parent company was 391 million yuan, a year-on-year increase of + 5.67%. The overall performance met expectations and maintained the “buy” rating.
Key investment points
The net profit attributable to the parent company in 2021 was + 15.18% year-on-year, and the net profit attributable to the parent company in Q4 was + 5.67% year-on-year. In 2021, the company realized an operating revenue of 16.021 billion yuan, a year-on-year increase of + 32.30%; The net profit attributable to the parent company was 1.684 billion yuan, a year-on-year increase of + 15.18%. Among them, Q4 achieved an operating revenue of 4.301 billion yuan, a year-on-year increase of + 22.30%; The net profit attributable to the parent company was 391 million yuan, a year-on-year increase of + 5.67%. The overall performance is in line with our expectations.
The home appliance business is under pressure in the short term, but the auto parts business continues to increase rapidly. Looking at the long-term growth sub business of the company, in terms of home appliances, the company is under pressure in the short term due to the slowdown of downstream demand and the rise of raw material prices in 2021, realizing an operating revenue of 11.218 billion yuan, a year-on-year increase of + 16.36%; The net profit attributable to the parent company was 1.104 billion yuan, a year-on-year increase of – 2.30%. However, in terms of auto zero, under the high climate of the industry, the company still maintained rapid growth in 2021, realizing an operating revenue of 4.802 billion yuan, a year-on-year increase of + 94.50%; The net profit attributable to the parent company was 580 million yuan, a year-on-year increase of + 74.78%. We are optimistic about the recovery of the company’s home appliance business after the recovery of consumption and the high growth of new energy vehicle business.
The subsequent consumer recovery is expected to usher in the release of household appliance demand. As the leader of refrigeration parts, the company determines to benefit from the marginal improvement of real estate policy + consumer recovery, which is expected to boost the overall performance and valuation of the household appliance sector. In the past two years, affected by multiple factors such as the strict control of real estate policies, the rise of raw material prices and sea freight, the overall performance of the household appliance sector has been poor. Superimposed on the downward consumption caused by the epidemic and the phenomenon of cold summer, the overall sales growth of household appliances has slowed down in the past two years. But in the near future, first of all, there are frequent favorable policies for real estate. As a post cycle industry of real estate, referring to the past real estate policy cycles, we believe that the marginal easing of real estate policy is expected to boost the overall market confidence and positive mood in the home appliance sector. Secondly, the consumption downturn after the epidemic has superimposed 21 years of cold summer, which has affected China’s household appliance consumption demand, and the overall sales of air conditioners have slowed down in the past two years. Referring to the historical growth rate of the online air conditioning industry, we believe that with the recovery of consumption, the demand for household appliances is expected to be released, and the air conditioning industry has entered a new round of upward sales cycle. Therefore, the performance and valuation of the sector are expected to boost at the same time, and both downstream machine manufacturers and upstream industrial chain parts enterprises will benefit.
The auto parts business has been brought in steadily and further expanded high-quality new energy customers outside China. The company began to layout the field of new energy vehicles as early as 2012, and firmly ranks among the industry leaders with outstanding technology and production advantages. In 2021, the company’s auto zero business revenue accounted for 29.98%, with a year-on-year increase of + 9.59pct; The net profit attributable to the parent company accounted for 34.44%, with a year-on-year increase of + 11.73%. At present, the company has basically built a customer network, covering world-famous new energy models, and has production bases in Mexico, Poland and India. As China’s new forces of car making set sail, the company’s new energy orders are further increased, the scale effect is prominent, and the cost is reduced, which is expected to drive the company’s performance to further exceed expectations.
Profit forecast and valuation
We are optimistic about the steady growth of the company’s home appliance business and the outbreak of new energy business. It is estimated that the company’s operating revenue from 2022 to 2024 will be RMB 225.01/30.252/40.132 billion respectively, with the corresponding growth rate of 40.45% / 34.44% / 32.66% respectively; The net profit attributable to the parent company was RMB 2.480/3.529/4.918 billion respectively, and the corresponding growth rate was 47.25% / 42.31% / 39.37% respectively. The corresponding PE is 25X / 17x / 12x respectively.
Risk tips
The recovery of consumer demand for household appliances is less than expected, and the price fluctuation risk of raw materials.
