\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 57 Shenzhen Yinghe Technology Co.Ltd(300457) )
Event: the company released its annual report for 2021: in 2021, the company achieved a revenue of 5.202 billion yuan, a year-on-year increase of 118.12%. The net profit attributable to the parent company was 311 million yuan, a year-on-year increase of 63.30%. The net profit deducted from non parent company was 288 million yuan, with a year-on-year increase of 79.09%. Achieve earnings per share of 0.48 yuan.
Event comments:
Revenue growth exceeded expectations, and orders from key customers increased rapidly. In 2021, the operating revenue of the company's lithium battery production equipment was 4.907 billion yuan, a year-on-year increase of 197.02%. In 2021, the company signed 10.6 billion yuan of new orders for lithium battery equipment. In 2020, the company signed about 3.3 billion yuan of orders for lithium battery equipment. In 2021, the new orders increased by 221.21% year-on-year. The new orders mainly came from Chinese foreign battery manufacturers, including Contemporary Amperex Technology Co.Limited(300750) , honeycomb energy, Byd Company Limited(002594) , LG, Gotion High-Tech Co.Ltd(002074) , etc. the top ten customers accounted for more than 90%. As of December 31, 2021, the company's contractual liabilities were 1.249 billion yuan, a year-on-year increase of 311.48%.
Gross profit margin is under great downward pressure, and cost control at the expense side has achieved initial results. In 2021, the gross profit margin of the company's sales was 21.89%, a year-on-year decrease of 9.03pct. On a quarterly basis, the quarterly gross profit margins of Q1, Q2, Q3 and Q4 were 28.53%, 22.64%, 20.78% and 20.41% respectively, showing a quarterly downward trend. We believe that the decline in the company's gross profit margin is due to the increase in labor costs caused by the rapid expansion of the number of employees and the rise in the prices of bulk commodities such as steel and copper. Through cost control, the company tries to reduce the impact of the decline of gross profit margin on net profit margin. In 2021, the company's sales expenses / management expenses / R & D expenses were 186 / 178 / 342 million yuan respectively, accounting for 3.57% / 3.42% / 6.58% of operating revenue, with a year-on-year change of -1.17 / - 1.73 / - 0.68pct.
Asset impairment further reduces the profit level, and the concentration of customer structure is expected to improve the quality of accounts receivable. In 2021, the company accrued asset impairment loss and credit impairment loss totaling 241 million yuan, which had a great impact on the company's net profit. The reason is that before 2019, the company was mainly oriented to small and medium-sized lithium battery enterprises, resulting in more bad debts of accounts receivable. At present, the balance of accounts receivable aged more than 3 years is 259 million yuan, and the book balance in 2-3 years is 166 million yuan. The pressure of credit impairment will be relieved in the future. At present, the company's customers are mainly first-line battery enterprises outside China, with low credit risk, and the quality of accounts receivable is expected to continue to improve.
The production capacity was greatly improved and the order receiving ability was further enhanced. The company expanded its production on a large scale in 2021, and successively invested in three new manufacturing bases, including Huizhou Dongjiang Industrial Park, Dongguan Jinke Industrial Park and Dongguan Tangxia Industrial Park. The theoretical full output value is expected to reach 13 billion yuan. By the end of 2021, the company had 7230 employees, an increase of 104.06% compared with 3543 in 2020. According to the company's announcement, from January to February 2022, the average monthly shipment of lithium battery equipment of the company is about 700 million yuan, which will be further improved in the future. Under the background of the accelerated production expansion of downstream battery manufacturers, the delivery capacity of lithium battery equipment is an important reference index for battery enterprises when purchasing. The substantial expansion of the company's production capacity in 2022 will improve the company's order receiving capacity.
Investment suggestions:
We expect the net profit of the company from 2022 to 2024 to be 675 / 1019 / 1194 million yuan and EPS to be 1.04/1.57/1.84 yuan respectively. The current share price corresponds to 25 / 17 / 14 times of PE. The demand for downstream power batteries is growing rapidly, the number of new orders signed by the company is increasing rapidly, and the customers are concentrated in the head battery manufacturers. There is still great room for growth in the future. We maintain its "buy" investment rating.
Risk tips:
Bad debt risk of accounts receivable; Risk of rising raw material prices; The downstream demand is lower than the expected risk; Risk of increased competition; Technology iteration risk.
