\u3000\u3 Shengda Resources Co.Ltd(000603) 305 Ningbo Xusheng Auto Technology Co.Ltd(603305) )
Event: on March 23, the company released its annual report for 2021. The company achieved an annual operating revenue of 3.023 billion (+ 85.77%), a net profit attributable to the parent company of 413 million (+ 24.15%) and a gross profit margin of 24.06%.
In 2021, revenue increased rapidly and profitability was under pressure. In 2021, the company’s revenue increased by 85.77% year-on-year, the net profit attributable to the parent company increased by 24.15% year-on-year, and the performance growth was slower than the revenue growth. Among them, Q4 achieved an operating revenue of 1.01 billion yuan, a year-on-year increase of about 94%, and a net profit of 81 million yuan in a single quarter, a year-on-year decrease of 20%. The reasons for the rapid growth of the company’s revenue in the fourth quarter are mainly due to the development of markets outside China and the rapid volume of core customers. The main reasons for the pressure on profitability include: 1) the rise of raw material prices, and the rise of aluminum prices by more than 30% in 2021, resulting in the growth rate of the company’s operating costs greater than the growth rate of revenue; 2) Rising international sea freight; 3) R & D expenses increased, and the company invested 129 million yuan in R & D in 2021, a year-on-year increase of 123.47%; 4) Exchange rate impact.
Focusing on the increment of new energy, the profitability is expected to be repaired in 2022. The company is an aluminum alloy structural part focusing on the new energy vehicle industry chain. The process includes die casting, extrusion and forging. Die casting mainly processes chassis parts with high precision. Extrusion mainly includes battery pack, anti-collision beam and subframe. The main products of forging process are steering knuckle, thermal management valve sector and other products. On the basis of die casting, the company has successfully expanded extrusion and forging processes. It is one of the few enterprises in China with three processes at the same time.
The company’s main customers are Tesla, accounting for about 40% of its revenue. Others include major new overseas forces such as lucid and rivian, foreign-funded automobile enterprises such as BMW, Daimler and Volkswagen, as well as important Chinese customers such as Great Wall Motor Company Limited(601633) , Contemporary Amperex Technology Co.Limited(300750) . In the future, we will continue to actively expand China’s major new power auto enterprises and other independent brand customers, with strong incremental certainty. In 2022, with the stabilization of raw materials and freight and the partial transmission of pressure on the cost side, the profitability of the company is expected to gradually improve.
Speed up the company’s production expansion, and large tonnage die-casting machines are in place one after another. According to the company’s research announcement, at present, all factories 1-5 of the company have reached production capacity, some factories 6 have reached production capacity, factories 7 / 8 / 9 are still under construction, and all nine bases can achieve an output value of 8 billion yuan. At present, the company’s production capacity is still relatively tight. In order to alleviate the pressure of production capacity, the company will build No. 10 plant in Nanxun, Hunan, with a project investment of 2.5 billion yuan and an area of about 500 mu. At present, the company has accumulated the use experience of large tonnage die casting machine (4400t), the design and manufacturing capacity of large tonnage die, and actively communicated with the main engine factory. With the procurement of large tonnage die casting machines (8000t and above) in place and the implementation of the scheme, it will quickly promote the progress of integrated die casting of the company.
Investment suggestion: it is estimated that the operating revenue of the company from 2022 to 2024 will be 3.93 billion yuan, 5.03 billion yuan and 6.34 billion yuan, and the net profit attributable to the parent company will be 680 million yuan, 870 million yuan and 1.24 billion yuan respectively. Corresponding to the current market value, PE will be 23.3, 18.3 and 12.9 times respectively, maintaining the “Buy-A” rating, and the six-month target price will be 45.00 yuan / share.
Risk warning: the risk of market price fluctuation of raw materials; The risk of intensified market competition; The risk that revenue depends on major customers; Risk of decline in gross profit margin.
