\u3000\u30 China Baoan Group Co.Ltd(000009) 88 Huagong Tech Company Limited(000988) )
Key points
Event:
On March 30, 2022, the company issued 2022q1 performance forecast and 2021 annual report:
The company expects that the net profit attributable to the parent company in the first quarter of 2022 will be RMB 200230 million, with a year-on-year increase of 75.88% – 102.27%, the net profit deducted from non net profit will be RMB 182212 million, with a year-on-year increase of 83.95% – 114.27%, and the basic earnings per share will be RMB 0.2-0.23.
The company’s operating revenue in 2021 was 10.167 billion yuan, a year-on-year increase of 65.65%; The net profit attributable to the parent company was 761 million yuan, a year-on-year increase of 38.24%; The net profit deducted from non parent company was 544 million yuan, with a year-on-year increase of 53.12%; The gross profit margin was 17.04%, a year-on-year decrease of 6.73 PCTs; The net interest rate was 7.36%, a year-on-year decrease of 1.45pcts.
The company’s operating revenue in 2021q4 was 2.798 billion yuan, with a quarter on quarter increase of 2.53% and a year-on-year increase of 71.98%; The net profit attributable to the parent company was – 41 million yuan, which was converted from profit to loss year-on-year in a single quarter; The net profit deducted from non parent company was -93 million yuan, which turned from profit to loss year-on-year in a single quarter; The gross profit margin was 14.79%, a quarter on quarter decrease of 2.44 PCTs, a quarter on quarter decrease of 7.22 PCTs, and the net profit margin was – 1.72%.
Comments:
The company’s 2021q1 performance exceeded expectations, and the main business of the market focused on the track increased significantly. In the first quarter of 2022, the company’s performance exceeded expectations, and the main business of the market focused on the track achieved substantial growth. Among them, the connection business and 5g application scenarios are more abundant, and customers’ demand for optical modules and digital small stations is growing rapidly. Perception business: with the steady increase of market penetration of new energy vehicles, the demand of new energy vehicle manufacturers for PTC heating components and sensors of the company is growing rapidly. The intelligent manufacturing business benefited from the rapid expansion of new energy related industrial chains and the accelerated development of intelligent manufacturing. The orders of the company’s laser equipment and intelligent production line increased rapidly.
In 2021, the company’s revenue exceeded 10 billion, and the three major businesses were comprehensively accelerated. After years of technology and product accumulation, the company has formed three business patterns: intelligent manufacturing equipment business with laser processing technology as the important support, optical connection and wireless connection business with information and communication technology as the important support, sensor and laser anti-counterfeiting packaging business with sensitive electronic technology as the important support. After completing the school enterprise restructuring in 2021, the company anchored its core business to the development track of new infrastructure, new energy and industrial digital intelligence, and officially entered a new stage of system growth and expanding strategic space. In 2021, the operating revenue exceeded 10 billion yuan for the first time, reaching an all-time high.
Intelligent manufacturing business: the company is committed to providing extensive and comprehensive laser intelligent manufacturing solutions for the industrial manufacturing field, comprehensively arranging the construction of laser intelligent equipment, automatic production line and intelligent factory. It is one of the largest laser equipment manufacturers in China and the world’s leading provider of intelligent manufacturing solutions.
The laser intelligent equipment business group focuses on the three businesses of “cutting, welding and washing”, focuses on the high-end market and high-quality customers, and continues to achieve high-quality development; At the same time, focus on building a product system with single machine intelligence, production line automation and factory intelligence, develop “specialized, special and new” high gross profit products and improve product competitiveness.
On the basis of consolidating the pan electronics industry, the laser precision system business group has grasped the development opportunity period of daily consumer goods and new energy industry, doubled investment, and formed a situation in which the troika keeps pace. Conduct in-depth research on the process of semiconductor, PCB, measurement and other fields, create and optimize industry-leading, specialized and new products in application fields such as semiconductor cutting equipment, PCB punching, miniled and 3D visual sorting, move forward to high-end equipment in core process, and build an overall industry solution with “nano high-end intelligent equipment” as the core of the business group.
In 2021, the company’s laser processing and series complete equipment business realized an operating revenue of about 2.607 billion yuan, with a year-on-year increase of 38.03%, of which the revenue of intelligent equipment business increased by 38% year-on-year, and the revenue of precision system business group increased by more than 30% year-on-year.
Connection business: the company has advanced end-to-end product lines and overall solutions in the industry. It is committed to becoming a world-class optoelectronic enterprise, serving the world’s top communication equipment and data application providers, and striving to build a world-class enterprise integrating personal, family and network intelligent communication terminals.
Further improve the R & D process of key optical network and 400g.1 wireless network access modules, and further improve the R & D process of key optical network and 400g.1 wireless network access products. Continue to promote the streaming verification of silicon optical chips, and silicon optical modules have entered the stage of small batch. The network terminal business pays close attention to the construction and growth demand of 5g indoor coverage, and enriches the product series based on the R & D and manufacturing capacity of 5g wireless stations. Expand the field of “smart cars” and develop new products such as laser headlamp photoelectric conversion module and ar-hud, so as to lay a solid foundation for sustainable growth in the future.
In 2021, the company’s optoelectronic device series products business realized an operating revenue of about 5.38 billion yuan, with a year-on-year increase of 103.38%. In terms of intelligent terminal business, it successfully opened up a new field of network terminals. Joinsite series wireless small station products were delivered in large quantities, with a year-on-year increase of 670%. The optical business relied on the new business of “prism + code disk”, with a year-on-year increase of about 50%.
Perception business: the company is committed to providing multi-dimensional perception and control solutions such as temperature, humidity, light and air for home appliances, automobiles, OA, medical treatment, consumer electronics and other fields, promoting the development of smart travel, smart home, smart medical treatment and smart city, and becoming an influential sensor system solution provider in the world.
The sensor business focuses on overcoming core technologies such as electronic control and optimizing strategic markets such as smart grid and smart appliances; The laser holographic anti-counterfeiting business will further accelerate the learning and absorption of IMR technology and product technology, strive to match the international level in performance, innovate the new effect and new products of the combination of optical texture and printing, achieve industry-leading, benchmark the world-class, and pre study the display panel IMR technology, INS products and processes, Tom products and processes.
In 2021, the company’s sensitive components business achieved an operating revenue of 1.415 billion yuan, with a year-on-year increase of 41.8%. The laser holographic anti-counterfeiting series product business achieved an operating revenue of 489 million yuan, with a year-on-year increase of 14.17%. Among them, the sales of PTC heaters for new energy vehicles increased by 176%, the sales of automobile temperature sensors increased by more than 47% year-on-year. The construction of fully automatic core and assembly and purification workshop for pressure sensors was completed, and the R & D and manufacturing level reached the world’s leading level.
The reform of separating schools from enterprises was completed, and the excess performance reward stimulated the vitality of the management. In 2021, the company completed the school enterprise separation reform, the controlling shareholder was changed to Guoheng fund, and the actual controller was changed to the state owned assets supervision and Administration Commission of Wuhan Municipal People’s government. As of March 2022, the shareholding ratio of Guoheng fund was 19%. In November 2020, the company’s chairman Ma Xinqiang and 39 other members of the company’s management team and core employees jointly invested in the establishment of a limited partnership runjunda, and contributed 150 million yuan to Guoheng fund. According to the supplementary agreement to the partnership agreement of Guoheng fund on May 12, 2021, the parties agree that based on the audited operating net profit of the company in 2020 (if it is less than 450 million yuan, it is 450 million yuan). From 2021 to 2023, if the operating net profit of the company achieves an annualized compound growth rate of 15%, that is, the operating net profit in 2023 increases by 52.09% compared with 2020, and the annual growth rate compared with the target value of the previous year is not less than 5%, Then runjunda will transfer a total of 980 million yuan of fund shares from SDIC innovation, tourism and sports group, Bishui group and Metro Group under the control of Wuhan SASAC.
The audited net operating profit of the company in 2020 is less than 450 million yuan. Therefore, when the net operating profit of the company in 21-23 years reaches at least 473 / 496 / 684 million yuan respectively, the transferee agreement can be fulfilled. After the school enterprise separation reform, the core backbone of the company will participate in the ESOP platform and increase the corresponding performance incentives, which will re stimulate new vitality 20 years after the establishment of the company.
Earnings forecast, valuation and rating: we believe that at the level of corporate governance, the change of control will bring positive changes, and the excess performance reward is expected to fully stimulate the vitality of the management; At the business level, we are optimistic about the market prospect of the company’s new energy vehicle PTC business and the growth potential of small base station business driven by 5g deep coverage. Taking into account the impact of the rise in the price of upstream raw materials, we lowered the company’s net profit attributable to the parent company from 2022 to 2023 to 10.63 (down 16.82%) and 14.28 (down 12.71%) billion yuan respectively. It is expected that the net profit attributable to the parent company in 2024 will be 1.887 billion yuan, maintaining the “buy” rating.
Risk tip: the expansion of PTC is less than expected, the market competition of optical module is intensified, and the demand cycle of 5g construction fluctuates.
