\u3000\u30 China Baoan Group Co.Ltd(000009) 88 Huagong Tech Company Limited(000988) )
In 2021, the annual revenue and performance achieved high growth. In 2021, the annual revenue was 10.167 billion yuan (+ 65.65%), the net profit attributable to the parent company was 761 million yuan (+ 38.24%), and the net profit attributable to the parent company after deduction was 544 million yuan (+ 53.12%). In the fourth quarter, the single quarter revenue was 2.798 billion yuan (+ 71.98%), the net profit attributable to the parent company was -41 million yuan (- 163.85%), and the net profit attributable to the parent company after deduction was -93 million yuan (- 569.97%). The rapid growth of annual revenue is mainly due to the remarkable results of internal reform and the comprehensive recovery and growth of all businesses. The growth rate of deducting non net profit was lower than that of revenue, mainly because the gross profit margin decreased from 23.77% in 2020 to 17.04% (down 6.73pct.), In the context of the price rise of upstream raw materials, the gross profit margin was suppressed, and the company’s new small base station business reduced the comprehensive gross profit margin.
In the first quarter of 2022, the company’s forecast performance achieved rapid growth, slightly exceeding market expectations. In the first quarter of 2022, the company expects to realize a net profit attributable to the parent company of RMB 200230 million (a year-on-year increase of 75.88% – 102.27%), and a net profit attributable to the parent company of RMB 182212 million (a year-on-year increase of 83.95% – 114.27%). The high-speed growth of performance is mainly due to the substantial growth of the market main business of the track focused by the company, especially the rapid growth of small base station business (contributing revenue from the second quarter of 2021) and the demand for PTC heating components and sensors. At the same time, the orders of laser equipment and intelligent production line in the company’s intelligent manufacturing business have increased rapidly.
The four major businesses grew in an all-round way. Optoelectronic device series products are the largest contributor to the company’s revenue, with a significant increase of 103.4%, mainly due to the large-scale shipment of joinsite series wireless small station products in the intelligent terminal business in 2021, and the revenue scale increased by 670% year-on-year. In the intelligent manufacturing business, the competitiveness of intelligent equipment business and precision system business group has been improved, and the revenue has increased by more than 30%. In the perception business, PTC sensor business has grown brightly, benefiting from the rapid development of new energy vehicles and the company’s share in China’s main engine plants. At the same time, the share of air conditioning temperature sensors has increased significantly; The laser holographic anti-counterfeiting business grew steadily.
Looking forward to 2022, the main industry is expected to maintain a high growth trend. The company will continue to benefit from the continuous scale deployment of 5g small base stations, the continuous high growth of the demand for PTC heaters of new energy vehicles and the continuous improvement of the company’s competitiveness in intelligent manufacturing business. The revenue is expected to maintain medium and high-speed growth. Under the background of alleviating the supply of raw materials, the superimposed company scale effect appears, and the overall profitability still has room to be improved.
Risk tip: the sales volume of new energy vehicles is lower than expected; Intelligent manufacturing business orders are less than expected.
Investment suggestion: for the first time, give a “buy” rating.
We are optimistic about the new vitality brought by the reform of incentive mechanism to the company and the continuous improvement trend of the company’s business competitiveness. We expect the company’s revenue to be 13.7/17.8/21.7 billion yuan from 2022 to 2024, with a year-on-year growth rate of 35.0/29.9/21.8%, and the net profit attributable to the parent company to be 9.2/11.7/1.43 billion yuan, with a year-on-year growth rate of 21.0/26.5/22.5%; Corresponding dynamic PE = 23 / 19 / 15x. For the first time, give a “buy” rating.
