\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 90 Dongguan Yutong Optical Technology Co.Ltd(300790) )
Key investment points
Performance summary: in 2021, the company achieved an operating revenue of 2.06 billion yuan, a year-on-year increase of 40.1%. The net profit attributable to the parent company was 240 million yuan, a year-on-year increase of 91.4%; The net cash flow from operating activities was about 310 million yuan, a year-on-year increase of 878.0%.
The performance has achieved rapid growth and the profitability has been significantly enhanced. In 2021, 1) revenue side: the company’s main business grew strongly, with a year-on-year increase of 40.1%. In terms of products, the operating revenue of the company’s fixed focus lens products was 1.37 billion yuan, a year-on-year increase of 46.7%, accounting for 66.4%; The revenue of zoom lens products was 640 million yuan, a year-on-year increase of 33%, accounting for 30.9%. 2) Profit side: the net profit attributable to the parent company increased by 91.4% year-on-year; The gross profit margin was 26.5%, with a year-on-year increase of 4.7pp, mainly due to the optimization of the company’s product structure and technological upgrading; The net interest rate was 11.8%, with a year-on-year increase of 3.2pp. 3) Expense side: the company’s sales expense increased by 108.5% year-on-year, mainly due to the increase of employee salary and share based payment. The sales expense rate was 1.3%, with a year-on-year increase of 0.4pp; The management expense ratio was 4.0%, with a year-on-year increase of 0.1pp; R & D expenses increased by 78.4% year-on-year, and the R & D expense rate was 6.5%, with a year-on-year increase of 1.4pp. Benefiting from the cost reduction benefits brought by the high prosperity of downstream demand and scale effect, the company achieved rapid growth in annual performance and significantly enhanced its profitability.
The car lens business expanded smoothly, injecting medium and long-term growth momentum into the company. The company has been involved in the field of vehicle for many years, and continues to introduce professionals to develop and manufacture vehicle specification products. The company takes the vehicle lens business as an important target market and business segment for layout, and has accumulated a large amount of early-stage technical reserves. At present, the company has mastered the production technology of aspheric glass lens, which is the key component of vehicle lens, and has applied the lens to high-end professional products. In August 2021, the company announced that it would invest 50 million yuan with its own funds to establish a wholly-owned subsidiary “Dongguan Yutong Automobile Vision Co., Ltd.” and began to focus on the field of vehicle lens. This measure reflects the company’s determination to further enter the vehicle lens market. At present, the company’s on-board lens is mainly used in on-board rear mounted products. The front mounted on-board products are progressing smoothly and are expected to be officially launched in 2022. With the advent of the era of intelligent driving, vehicle lens is the optical lens field with the largest increment in the future. The market potential is huge and the volume and price will rise together. We believe that the company’s vehicle lens business has a promising future and is expected to provide medium – and long-term growth momentum for the company.
Profit forecast and investment suggestions. We expect the net profit of the company to be about RMB 315 / 417 / 524 million from 2022 to 2024 respectively, and the compound growth rate of net profit attributable to the parent company will remain above 25% in the next three years. Considering that the company is a leading manufacturer of security lens, strong demand in the downstream market, the profitability of the company under scale effect and cost control is expected to be further improved, and the “buy” rating is maintained.
Risk warning: the security demand does not meet expectations; The market expansion of large zoom lens did not meet expectations; Industry competition intensifies.
