\u3000\u3 Guocheng Mining Co.Ltd(000688) 106 Suzhou Jinhong Gas Co.Ltd(688106) )
China’s special gas leader, with rapid revenue growth, maintained the “buy” rating
The company released its annual report for 2021 on March 25, 2022, and achieved a revenue of 1.741 billion yuan in 2021, a year-on-year increase of + 40.05%; The net profit attributable to the parent company was 167 million yuan, a year-on-year increase of – 15.34%; Deduct non net profit of 130 million yuan, a year-on-year increase of – 21.11%; The gross profit margin was 29.96%, with a year-on-year increase of -6.51pcts. It is calculated that the company achieved a revenue of 507 million yuan in a single quarter in 2021q4, a year-on-year increase of + 47.57% and a month on month increase of + 11.53%; The net profit attributable to the parent company was 41 million yuan, with a year-on-year increase of – 24.15% and a month on month increase of + 7.15%; Deduct non net profit of 38 million yuan, a year-on-year increase of – 9.13% and a month on month increase of + 55.98%; The decline of the company’s gross profit margin is mainly due to the increase of the company’s operating costs under the macro background of the continuous transmission of the pressure of commodity price rise. Considering the impact of the price rise of upstream raw materials, we lowered the performance forecast for 20222023 and added the performance forecast for 2024. It is estimated that the net profit attributable to the parent company in 20222024 will be RMB 266 (- 0.83) / 371 (- 1.31) / 491 million, corresponding to EPS of RMB 0.55 (+ 0.05) / 0.77 (- 0.03) / 1.01. The current stock price corresponding to PE is 39.8/28.6/21.6 times. The company is the leader of special gases in China, with leading technology and excellent customer resources. It raises funds to strengthen production capacity and R & D, At the same time, China’s policies actively support the development of the industry, the prosperity of downstream industries is high, the domestic substitution of special gases is the general trend, the company has great growth potential, and maintains the “buy” rating.
Vertical innovation, horizontal integration and sufficient growth momentum
In terms of revenue by business, in 2021 (1), the revenue of bulk gas was 700 million yuan, with a year-on-year increase of + 45.0%, and the gross profit margin was 27.21%, with a year-on-year increase of -10.91pcts; (2) The revenue of special gas was 660 million yuan, with a year-on-year increase of + 46.9% and a gross profit margin of 35.46%, with a year-on-year increase of -2.72 PCTs; (3) The natural gas revenue was 230 million yuan, with a year-on-year increase of + 65.0% and a gross profit margin of 10.73%, with a year-on-year increase of -7.82pcts; In 2021, ultra pure ammonia, high-purity nitrous oxide and other products independently developed by the company were officially supplied to sk Hynix, Semiconductor Manufacturing International Corporation(688981) and other companies; At present, it has served 14 hydrogenation stations or automobile internal skid mounted stations in total; The company signed a supply contract with northern integrated circuit technology innovation center on November 19, 2021 to supply nitrogen, hydrogen, oxygen and other electronic bulk gases, and signed a supply contract with Guangdong core YUENENG Semiconductor Co., Ltd. on February 8, 2022 to supply nitrogen, argon, hydrogen and other electronic bulk gases. The breakthrough of the electronic bulk gas project proves the success of the company’s strategy of entering the electronic bulk gas business through the electronic special gas business, and opens a broad new business field of the company’s electronic bulk gas. Most of the projects raised and invested by the company have been completed, and the growth momentum is sufficient.
Risk warning: price fluctuation of raw materials, risk of product R & D falling short of expectations, and intensified market competition.
