\u3000\u3 China Vanke Co.Ltd(000002) 937 Ningbo Sunrise Elc Technology Co.Ltd(002937) )
Event: Ningbo Sunrise Elc Technology Co.Ltd(002937) released the annual report for 2021 on March 30, 2022. The company achieved an operating revenue of 1.252 billion in 2021, with a year-on-year increase of 20.32%; The operating profit was 123 million yuan, a year-on-year decrease of 14.86%, and the net profit attributable to shareholders of listed companies was 113 million yuan, a year-on-year decrease of 10.87%.
The negative drag of the external environment is the main reason for the decline of the company's profits. Affected by the global trade war, epidemic, shortage of materials in the supply chain, rising raw material prices, exchange rate fluctuations and other negative factors of the economic environment, the industry situation faced by Xingrui in 2021 is still severe. Although both intelligent terminals and automotive electronics, which account for the largest proportion of revenue, have achieved positive growth in revenue (especially automotive electronics has achieved nearly 60% revenue growth), the gross profit margin has declined by 8.22 and 3.79 percentage points respectively, and the pressure on the cost side and operation side is very obvious. Considering the negative impact factors on the industry side, especially the epidemic situation, shortage of materials and raw materials, are not the norm of the industry market. With the passage of time, the marginal effect of these negative effects will gradually decrease. The company is expected to return to the normal track of double improvement of revenue and profit level in the second half of this year. At that time, the company's new production capacity in Southeast Asia manufacturing base, new product breakthroughs in Shanxi Guoxin Energy Corporation Limited(600617) automobile related fields, including the gradual expansion of downstream customer coverage, will fully reflect the elasticity brought by the positive area accumulation in the past two years.
The growth rate of connections and components in the field of new energy vehicles is considerable, and Xingrui's competitive advantage is gradually emerging. In 2021, the company's overall automotive electronics revenue reached 395 million yuan, with a rapid growth of 59.95%, setting a new high in sales in subdivided fields over the years. In this data, more growth obviously comes from the contribution related to new energy vehicles, because under the background of global lack of core and material, the shipments of traditional automobile manufacturers are still declining in 2021. The company can achieve countercurrent growth under this background, and the products related to new energy vehicles are indispensable.
First of all, thanks to the technology and mass production capacity accumulated by synchronous research and development with Panasonic and other major customers, the company has obtained the cooperation opportunity with Shanxi Guoxin Energy Corporation Limited(600617) automobile head enterprises in China, and made a breakthrough in providing new energy automobile three electricity products for new energy automobile head customers. In other words, the company achieved customer iteration and growth in 2021, obtained more industry customer resources, and rapidly opened the channel end export of the company.
Second, the company has achieved a breakthrough in research and development from single parts and components to module products in the field of three electricity, the invention patent of fisheye terminal has also been publicized, and the sample has been recognized and applied by major downstream customers, which means that the company's product end has not only relied on connectors or a few BDU products in the past, but also began to expand to PDU, OBC, DC-DC and all connector module components related to fisheye terminal. The average value of the company's deliverable components is obviously gradually superimposed and rising, which is a very good growth framework.
Obviously, the company's future product delivery mode will move from a single component in the past to a customized solution closely embedded with the customer's early development, and the coverage will extend to all modular units on new energy vehicles. Ningbo Sunrise Elc Technology Co.Ltd(002937) the deep accumulated advantages in the composite fields of high-voltage and strong current transmission / isolation and module design, including precision inlay injection molding, are gradually emerging and can grow.
Investment rating and suggestions: in many reports on Xingrui in the past, we have been explaining and transmitting Ningbo Sunrise Elc Technology Co.Ltd(002937) 's inside information and channel advantages in the field of new energy vehicle connection and components. Judging from the attention of the company since the second half of 2021, Ningbo Sunrise Elc Technology Co.Ltd(002937) has successfully walked out of the "cognition and learning period" that was not known by the market in the past, Many investors began to recognize and accept Xingrui's leading position in the industry. Although at present, subject to some negative factors of the peripheral environment and industry, the company's profit growth is not as expected, but this is only a short-term inhibition without concealing the shortcomings. The recent adjustment of the company's share price has fully reflected the market's attention to these factors. We estimate that the net profit of the company from 2022 to 2024 will be 149 million yuan, 261 million yuan and 384 million yuan respectively, and the corresponding valuation of the current market value will be 31.34, 17.89 and 12.17 times respectively. We are optimistic about the sustainable growth space of the company in the future and maintain the buy rating of the company.
Risk tips: (1) the global economy is declining again due to the continuous impact of the epidemic, (2) the downstream demand increment of 5g terminals and automotive electronics is less than expected; (3) The production rate of new factories in Southeast Asia was lower than expected. (4) The company's new energy vehicle customer expansion and category iterative upgrading were not as expected.
