\u3000\u3 Shengda Resources Co.Ltd(000603) 267 Beijing Yuanliu Hongyuan Electronic Technology Co.Ltd(603267) )
Event: the company released its 2021 annual report, realizing revenue (2.403 billion yuan, + 41.36%) and net profit attributable to the parent company (827 million yuan, + 70.09%).
The self-produced business maintained rapid growth and achieved remarkable results in capacity expansion
Benefiting from the company's strong demand for self-produced and agency products and the layout of industrial base, the company not only realizes the expansion of production capacity and product categories, but also ensures the delivery of fast-growing orders, driving the rapid growth of the company's revenue and profit, including:
1) self produced business, thanks to the continuous strong demand of downstream customers for highly reliable products and the continuous improvement of the company's production capacity, the company achieved revenue (1.348 billion yuan, + 52.07%), and the gross profit margin increased by 0.93pct to 52.07% year-on-year, including the revenue of core product ceramic capacitor (1.314 billion yuan, + 50.14%), filter product revenue (20 billion yuan, + 81.79%), and the top five customers of self-produced business Aerospace Hi-Tech Holding Group Co.Ltd(000901) , aerospace science and industry, China Electronics Technology Aviation industry and ordnance industry group achieved revenue (957 million yuan, + 44.78%), accounting for 3.6pct to 71% of self-produced business revenue.
2) agency business: due to the expansion of the market scale of the industry in which the customers are located, the demand for electronic components increases rapidly. At the same time, the company increases the development of new products, new brands and new customers. The annual revenue (1.043 billion yuan, + 29.13%) and the gross profit margin increases by 3.06pct to 29.13% year-on-year, which is mainly due to the high growth rate of passive components with high gross profit level. The top five customers of agency business realize revenue (657 million yuan, + 31.66%), Accounting for 62.94% of the agency business income, and the concentration was further improved.
The production and sales volume reflects the remarkable effect of capacity expansion. In 2021, the production of ceramic capacitors increased by 137.72% year-on-year, mainly due to the production of some production capacity of Suzhou raised investment production line at the end of 2020, and the significant increase of inventory mainly due to: 1) the expansion of the company's business scale needs to increase the inventory of highly reliable products, so as to meet the rapid growth of customers' demand for highly reliable products; 2) The production of the raised investment project resulted in a significant increase in the output of civil ceramic capacitors, but the sales lagged behind the increase in output due to the long product verification cycle.
The gross profit margin and net profit margin increased simultaneously, and the R & D expenses increased significantly. In 2021, the gross profit margin of the company increased by 4.76pct to 51.51% year-on-year, which was mainly due to the stable gross profit margin of self-produced business, the increase of gross profit margin of agency business and the increase of the proportion of self-produced business income; The sharp increase in gross profit margin and the total decrease of asset impairment loss and credit impairment loss by 27 million yuan led to the year-on-year increase of net profit margin by 5.81pct to 34.4%. In 2021, the company's R & D expenses increased by 78.68% year-on-year, of which 37 million yuan was withdrawn for Q4 alone, which was mainly due to the company's continuous investment in new R & D projects, expansion of product categories and improvement of product performance, and the project R & D work carried out after Hongyuan Suzhou was put into operation, resulting in a significant increase in R & D expenses.
The forward-looking indicators of the balance sheet performed well, and the cash flow increased significantly. The company's prepayment increased by 51.38% compared with the beginning of the period, mainly due to the increase of the prepayment paid by the agency business to the original factory and the performance bond with the expansion of the agency business scale. At the same time, the inventory increased by 93.25% compared with the beginning of the period, mainly due to the expansion of the company's business scale and the increase in the stock of goods and raw materials after the completion of Suzhou raised investment project; At the same time, thanks to the improvement of sales collection from downstream customers, the company's cash flow from operating activities increased significantly by 247.82% year-on-year.
Equity incentives help long-term development, unlock conditions and show development confidence
The company launched an equity incentive plan to grant 103 people, including directors, deputy general managers, core managers and core technical backbones, with a total of 1 million shares (accounting for 0.43% of the total share capital) at a price of 61.71 yuan / share. The unlocking condition is that the revenue growth from 2021 to 2023 will not be less than 30%, 69% and 120% based on the operating revenue in 2020; Or based on the net profit in 2020, the net profit growth from 2021 to 2023 will not be less than 35%, 76% and 128%. We believe that after the company launches the equity incentive plan, it will successfully bind the core business backbone and the interests of the company, fully mobilize the enthusiasm of employees and continue to contribute to the long-term development of the company. At the same time, the assessment benchmark with the high base in 2020 as the unlocking condition also shows the company's confidence in future development.
Investment suggestion: the company's electronic component technology is leading in the industry, and its self-produced business is a leading military MLCC enterprise, which occupies a large share in the aerospace market. Considering the accelerating trend of information construction and domestic substitution of our army, the company is expected to benefit from the core; The existing customers of the agency business are stable and expanding horizontally, and it is expected to contribute new performance increment to the company in the future. We expect the net profit of the company from 2022 to 2024 to be 1.143 billion yuan, 1.548 billion yuan and 2.005 billion yuan respectively, with corresponding valuations of 26, 19 and 15 times respectively, maintaining the "Buy-A" rating.
Risk warning: military orders are less than expected; Civil goods orders were less than expected.
