\u3000\u3 China Vanke Co.Ltd(000002) 050 Zhejiang Sanhua Intelligent Controls Co.Ltd(002050) )
Event: in 2021, the company realized an operating revenue of 16.021 billion yuan, a year-on-year increase of + 32.3%, and a net profit attributable to the parent company of 1.684 billion yuan, a year-on-year increase of + 15.2%; Deduct the net profit not attributable to the parent company of RMB 1.487 billion, a year-on-year increase of + 17.1%. According to this, the operating revenue of 2021q4 was 4.301 billion yuan, a year-on-year increase of + 22.3%, and the net profit attributable to the parent company was 391 million yuan, a year-on-year increase of + 5.7%; Deduct the net profit not attributable to the parent company of 321 million yuan, a year-on-year increase of + 2.4%. Revenue performance is in line with expectations.
Comments: in the past 21 years, the development of both sectors of the company outperformed the growth of the downstream market, reflecting the strong market competitiveness of the company in the field of new energy vehicles and refrigeration accessories. In terms of products, the business of refrigeration, air conditioning and electrical parts achieved a revenue of 11.218 billion yuan (YoY + 16.4%) in 21 years, and the business of auto parts showed higher growth. In 21 years, it generated a revenue of 4.802 billion yuan, nearly doubling the growth. Among them, the revenue of thermal management products of new energy vehicles and traditional fuel vehicles was 4.004 billion yuan (83.4%) and 799 million yuan (16.6%) respectively, We expect that the sharp growth of Xinneng car business will mainly benefit from the production and sales volume of core customers. In terms of regions, the company’s domestic sales revenue in 21 years was 8.112 billion yuan (YoY + 38.3%), accounting for 2.2pct to 50.6%, and its overseas sales revenue in 21 years was 7.908 billion yuan (YoY + 26.6%), accounting for 49.4%.
In terms of profitability, the overall gross profit margin of the company was 25.7% in 21 years, with a year-on-year decrease of – 2.2pct. The gross profit margin of the two major businesses declined to varying degrees: the gross profit margin of refrigeration and air conditioning electrical parts was 26.5%, with a year-on-year decrease of – 1.5pct, and the gross profit margin of auto parts was 23.9%, with a year-on-year decrease of – 3.4pct. We expect that the main reasons are as follows: 1) the high shipping price has put pressure on the transportation cost, and the overseas business accounted for 49.4% in 21 years; 2) The raw material cost of auto parts business continues to be under pressure. Taking aluminum, which is widely used, as an example, the price of aluminum remained volatile and upward in 2021, and by the end of 21, the price of aluminum had reached a 10-year high; 3) With the development of auto parts business, the proportion of components with relatively low gross profit has increased, which has dragged down the overall profitability. Non self-made components in components need to be purchased out and bring some additional management expenses. Therefore, the gross profit margin is slightly lower than that of a single component; 4) The impact of RMB exchange rate appreciation; 5) After the new production capacity is put into operation, the depreciation causes the current operating cost to rise.
In terms of expenses, the rates of sales / management / R & D / financial expenses in the past 21 years were 2.8% / 5.5% / 4.7% / 0.5% respectively, and the comparable caliber was – 0.2 / – 0.8 / + 0.4 / – 0.5pct year-on-year. Under the pressure of gross profit, the comprehensive expense rate was reduced. Only R & D expenses increased investment for the layout of cutting-edge technologies and the establishment of patent protection, so as to consolidate the company’s continuous leading product and technical advantages. Under the comprehensive influence, the net interest rate of the company in 21 years was 10.6%, with a year-on-year increase of -1.5pct. However, quarterly, the decline in profitability has gradually narrowed, the margin has begun to improve, and the recovery trend of profitability has been established. We expect that in the future, with the gradual improvement of the price linkage mechanism between the company and customers and the marginal improvement of freight and raw material costs, the profitability in 22 years is expected to stabilize and rise.
Looking forward to the follow-up, the medium and long-term growth of the company has clear support. Refrigeration and air conditioning electrical parts: 1) the downstream household appliance sector is expected to usher in restorative growth under the expectation of marginal improvement in demand. Under the opportunities of energy efficiency upgrading, refrigerant switching and consumption upgrading, the advantageous product electronic expansion valve is expected to be in large quantity; 2) Or transfer in the orders received from some core air conditioning and refrigeration customers; 3) There is a strong demand for vaccine and food cold chain distribution outside China. The company’s commercial refrigeration is developing at a high speed, and the space is still vast. Auto zero business, booming production and sales in the new energy vehicle market, sufficient orders in hand, enabling future growth, growth in the scale of core customers + active contact with new power vehicle enterprises are expected to achieve rapid growth with the downstream prosperity.
Investment suggestion: Sanhua, as a global leader in thermal management, has been actively engaged in R & D, building solid technical barriers, and continuously strengthening its leading products, customers and scale advantages. Under the dual influence of high industry prosperity and high product quality, we continue to be optimistic about Sanhua’s leading position and growth in the field of thermal management. We expect the net profit of 22-24 years to be RMB 2293 / 2966 / 3621 million (the value was RMB 2219 / 2.8 billion 22-23 years ago), and the corresponding dynamic valuation is 26.17x/20.23x/16.57x, maintaining the “buy” rating.
Risk warning: the risk that the price of raw materials will continue to rise; The risk of overseas epidemic aggravation; Risk of lower than expected downstream sales.
