\u3000\u3 Shengda Resources Co.Ltd(000603) 267 Beijing Yuanliu Hongyuan Electronic Technology Co.Ltd(603267) )
Event: the company released its annual report for 2021, which realized a revenue of RMB 2.403 billion, a year-on-year increase of 41.36%, a net profit attributable to the parent of RMB 827 million, a year-on-year increase of 70.09%, a deduction of non net profit of RMB 812 million, a year-on-year increase of 72.50%, and a basic EPS of RMB 357.
The performance growth in 21 years is in line with expectations, and the revenue in 22 years will continue to grow rapidly. The current revenue was 2.403 billion yuan (YoY + 41.36%), and the net profit attributable to the parent was 827 million yuan (YoY + 121.25%). In a single quarter, Q4’s revenue was 523 million yuan (YoY – 6.49%, qoq-6.60%), and the net profit attributable to the parent company was 170 million yuan (YoY + 2.34%, qoq-15.84%), and the growth of revenue and performance basically met the expectations.
The high performance growth of the whole year was mainly due to two reasons: first, the demand for downstream military products continued to be superimposed in large quantities, and the raised and invested capacity of the company’s self-produced business was gradually released; Secondly, the company’s profitability increased significantly, of which the gross profit margin in 2021 was 51.51%, with a year-on-year increase of 4.76pct, mainly due to the scale effect of production and the increase in the proportion of highly reliable products.
In terms of business, the company’s Q4 self-produced business revenue is 251 million (YoY – 17.51%, qoq-25.96%). Seasonal fluctuations superimpose the high base in 2020, resulting in a slowdown in the growth of self-produced business, and 2022q1 is expected to return to positive growth month on month; The single quarter revenue of agency business is 262 million (YoY + 4.38%, qoq-9.38%), increasing or entering a stable range.
Looking forward to the whole year of 2022, the upstream view of military industry is expected to continue to improve, and the self-produced business will continue to grow rapidly. However, considering the high base, the annual growth rate is expected to be about 27.6%, the growth rate of agency business is expected to be about 14.1%, and the full caliber revenue is expected to increase by about 21.7%.
The stock repurchase closely followed the incentive plan and demonstrated the company’s confidence in development. On June 3, 2021, the company granted 928000 shares with 61.34 yuan / share, and the performance evaluation conditions are relatively loose. The total amortization required for the incentive plan is 499542 million yuan, of which 21.647 million yuan, 19.449 million yuan, 7.493 million yuan and 1.665 million yuan will be amortized from 2021 to 2024 respectively. On June 11, the company’s stock repurchase plan was issued. It is planned to repurchase 30-60 million yuan of shares at no more than 120 yuan / share. As of December 9, 335100 shares have been repurchased, with an average price of 114.2 yuan. We believe that equity incentive and stock repurchase have been carried out successively in a short time, which shows the management’s confidence in the future development of the company.
The inventory grows rapidly and the future growth is guaranteed. The company’s current inventory was 415 million, with a year-on-year increase of 93.25% and 16.6% over 2021q3, mainly due to the increase in the stock of goods and raw materials, accounting for 51.6% and 36.9% respectively. We believe that the rapid growth of inventory indicates that the future growth of the company is still predictable.
Deeply cultivate the highly reliable MLCC market, multi layout filters, microwave modules and other products. It is estimated that the scale of China’s highly reliable MLCC market will be about 5.5 billion yuan in 2021, with a compound growth rate of more than 50% in the past two years. Benefiting from the continuous progress of equipment informatization, intellectualization and localization, the highly reliable MLCC market will maintain a rapid growth trend. The company is deeply rooted in the highly reliable MLCC market and is expected to continue to benefit. In addition, the company accelerated the layout of filters, microwave modules and other fields and deepened independent control, in which the filter generated about 197977 million (+ 81.79%). The company actively expands to the downstream of the electronic component industry chain, with clear product diversification path and sustainable development.
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 1.089 billion, 1.362 billion and 1.646 billion respectively, EPS will be 4.69 yuan, 5.86 yuan and 7.08 yuan, and the corresponding PE of the current stock price is 28x, 22x and 18x. Referring to the valuation of comparable companies, although the company does not have advantages, it has achieved results in view of the pure and diversified development of the company’s business. We are optimistic about the long-term development of the company and maintain the “recommended” rating.
Risk warning: the risk of demand fluctuation of downstream orders; Risk that the horizontal expansion of products is less than expected
