\u3000\u3 Guocheng Mining Co.Ltd(000688) 777 Zhejiang Supcon Technology Co.Ltd(688777) )
Event overview
On March 28, Zhejiang Supcon Technology Co.Ltd(688777) disclosed the performance forecast for the first quarter of 2022: it is estimated that the net profit attributable to the parent company in Q1 of 2022 will reach 46-55 million yuan, an increase of 31.30% to 56.99% year-on-year; The net profit deducted from non parent company was 27.5-33 million yuan, with a year-on-year increase of 70.07% to 104.08%. Considering that the growth rate of net profit attributable to the parent company of Q1 in 2021 is close to 200% and the base is relatively high, the year-on-year growth rate of performance in the first quarter of this year reached an average of more than 40%, exceeding the previous market expectation.
The performance exceeded expectations due to the improvement of product strength and the strong transformation demand of the industry
We believe that the superior performance of Zhejiang Supcon Technology Co.Ltd(688777) 2022 in the first quarter is based on the excellent product technical ability. The company's distributed control system (DCS), industrial software and automation instruments have formed a good synergy, and jointly broke through multiple major customers, with the proportion of large projects increasing. At the industry level, Zhejiang Supcon Technology Co.Ltd(688777) the petrochemical, chemical, electric power, metallurgy and other process industries served by are upgrading in the direction of informatization, intelligence, greening and service. The digital needs of enterprises in the field have begun to transform to full life cycle digital, which puts forward higher requirements for the technical leadership, comprehensive coverage and independent controllability of digital transformed products and services, The strong demand for transformation has driven the continuous improvement of the company's performance.
Important customers increase capital expenditure, and the downstream prosperity of the Chinese market is high
China Petroleum & Chemical Corporation(600028) is the largest enterprise in China's chemical industry and also an important customer of Zhejiang Supcon Technology Co.Ltd(688777) downstream. According to the annual performance report of 60 Tianjin Guifaxiang 18Th Street Mahua Food Co.Ltd(002820) 21, the planned capital expenditure of the company in 2022 is 19.8 billion yuan, with a year-on-year increase of 18%. According to the company's annual report, in order to ensure the security of national energy supply, China Petroleum & Chemical Corporation(600028) will increase investment in industry intelligence improvement, digital transformation, new energy expansion and green and low-carbon production. The increase of capital expenditure of chemical enterprises represented by China Petroleum & Chemical Corporation(600028) makes the downstream high boom of Zhejiang Supcon Technology Co.Ltd(688777) China market expected to continue. On the other hand, from the perspective of industry development, the continuous enrichment and growth of the scale and demand of by-products industries such as hydrogen energy, coal chemical industry and fine chemical industry may gradually smooth the cyclical fluctuations in the large chemical industry.
With the qualification of Saudi Aramco supplier, the overseas market is ready to go
According to WeChat official account, Saudi Arabia formally entered the list of suppliers in Saudi Arabia in March 16th, through the audit of suppliers of Saudi Amy, the world's largest oil producer. In the past year, the company has successively completed the investment service certification of China ODI, the national development and Reform Commission and the Saudi Ministry of Commerce, and passed the Saudi Aramco information security compliance certification. Officially entering the supplier list of Saudi Aramco has not only taken a solid step for Zhejiang Supcon Technology Co.Ltd(688777) to explore the overseas high-end market, but also greatly promoted the continuous improvement of the company's quality, technology, production and management system in the future. Facing the international market with larger demand, the company's overseas business revenue is expected to achieve long-term growth.
Investment advice
Zhejiang Supcon Technology Co.Ltd(688777) is China's leader in process industry products and solutions. It has the attributes of intelligent manufacturing, industrial software and domestic substitution, and enjoys a certain valuation premium. The performance in the first quarter of 2022 exceeded expectations, laying a solid growth foundation for this year's development. It is estimated that the revenue growth rate of the company from 2021 to 2023 will be 43.1% / 33.7% / 33.8% respectively, and the growth rate of net profit attributable to the parent company will be 36.5% / 35.5% / 39.1% respectively, maintaining the investment rating of buy-a. Give a six-month target price of 97.80 yuan, equivalent to 60 times the dynamic P / E ratio in 2022.
Risk warning: the research and development of core technology is not as expected; Product promotion and industrial ecological construction were not as expected.
