With the high performance in 2021 and optimistic expectations in 2022, Hengdian Group Dmegc Magnetics Co.Ltd(002056) ( Hengdian Group Dmegc Magnetics Co.Ltd(002056) . SZ) has been frequently surveyed by institutions recently, and the performance description meeting has also attracted many investors.
On the afternoon of March 30, focusing on the goal of year-on-year revenue growth of more than 35% this year, the management of the company disassembled the major business segments at the performance meeting: the magnetic material segment maintained an overall growth target of more than 10%, and made it clear that the photovoltaic and lithium battery businesses accelerated to sea. When asked about the operation in the first quarter, Wu Xueping, the Secretary of the board of directors, responded: “the operation is good and will increase year-on-year.”
new energy business accelerated to sea
Over the past year, Hengdian Group Dmegc Magnetics Co.Ltd(002056) magnetic materials sector has maintained stable growth, and new energy sector has a prominent year-on-year growth, with high market attention.
In 2021, the company achieved a revenue of 12.607 billion yuan, an increase of 55.54% over the same period last year. Among them, the revenue contributed by magnetic materials was 4.269 billion yuan, a year-on-year increase of 26.39%; The new energy sector sold a total of 48gw of photovoltaic and 140 million lithium batteries, with a revenue of about 7.4 billion yuan, a year-on-year increase of 87%.
With the increase of downstream demand, the total capacity of photovoltaic modules of the company has been increased to 5GW On this basis, Ren Hailiang, chairman of the board, said that this year’s battery chips will strive for full production and sales throughout the year, and all external sales will be made except for their own use. “With the expansion of production capacity, we will increase the expansion of the Chinese market while maintaining the competitive advantage in the overseas market and increasing the market share, and improve the component shipments through cooperation with some central and state-owned enterprises.”
Based on the channel advantages accumulated in the photovoltaic business, Ren Hailiang said that the company will adopt a similar strategy to promote lithium battery products overseas this year. Ren Xiaoming, deputy general manager, said: “the sales in 2020 and 2021 will be dominated by Chinese customers, and the proportion of overseas direct delivery will be gradually increased from 2022. The company put into operation 148 million lithium battery projects last year, which are expected to reach full production this year, and the 6gwh project is expected to be completed in the fourth quarter of this year. The lithium battery revenue in 2022 is expected to double that of last year.”
According to Ren Xiaoming, the company plans to reach a scale of more than 10gwh in 2-3 years. The company’s new investment project is based on the 18650 cylinder and has the ability to upgrade 21700, mainly aiming at the small power application market. The layout of lithium battery will be considered in the future.
20x PE can’t match the performance growth
Different from the hot business development, Hengdian Group Dmegc Magnetics Co.Ltd(002056) share price trend continues to be weak, and when the share price will get out of the trough is also the focus of this performance meeting.
Deputy general manager Guo Xiaodong responded that the decline of share price was affected by many factors. For example, since the beginning of the year, the Shenzhen stock index has fallen by about 19%, which has led to an irrational decline in the shares of many good companies. Wu Xueping said directly: “I personally think that for a stable and growing company, the price earnings ratio of 20 times is underestimated.”
The financial Associated Press reporter noted that investors’ concerns about Hengdian Group Dmegc Magnetics Co.Ltd(002056) are mainly focused on the fact that the profit growth rate is lower than the revenue growth rate.
In 2021, the company’s revenue increased by 55.54% year-on-year, and the attributable net profit increased by 10.54% year-on-year. Facing the question of “increasing income without increasing profit”, Wu Xueping responded that from the perspective of the company, last year’s operation was not to increase income without increasing profit, but that the revenue growth rate exceeded the profit growth rate. With the return of the value of upstream materials in the industry to rationality, the company’s comprehensive competitiveness will be further reflected.
Fang Jianwu, chief financial officer, said that the year-on-year decline in the gross profit margin of the company’s products in 2021 was mainly affected by the sharp rise in the price of raw materials, the sharp rise in sea freight, exchange rate fluctuations and other factors, but the horizontal comparison was still at a high level in the industry. “From the current operating situation, the gross profit in the first quarter of this year improved month on month.”
Since this year, raw materials on lithium batteries have continued to grow, and downstream enterprises have continued to be under pressure. Ren Xiaoming revealed that the gross profit margin of lithium battery Q1 is expected to remain at about 20%. In the face of the pressure of raw material price rise, the company mainly responds by appropriately storing raw materials, improving internal management and properly transmitting to the downstream.
