\u3000\u30 China Baoan Group Co.Ltd(000009) 88 Huagong Tech Company Limited(000988) )
Event: on March 29, Huagong Tech Company Limited(000988) released the annual report of 2021 and the performance forecast of Q1 in 2022, in which the revenue in 2020 was 10.167 billion yuan, a year-on-year increase of 65.65%, and the net profit attributable to the parent company was 761 million yuan, a year-on-year increase of 38.24%; In 2022, the net profit attributable to the parent company in Q1 is expected to be RMB 200 million ~ 230 million, an increase of 75.88% ~ 102.27% over the same period of last year, and the performance is in line with our expectations.
The three business segments made steady progress and Q1 performance increased steadily: the operating revenue achieved rapid growth in 2021, of which the optoelectronic device business increased by 103.38% year-on-year and the intelligent equipment business increased by 38% year-on-year, driving the rapid growth of annual revenue. In 2022, the main market focused by Q1 company increased significantly, and the demand for optical modules, small base stations and PTC heating components / sensors of energy vehicles continued to increase. Benefiting from the rapid expansion of new energy industry chain and the rapid growth of orders for laser equipment and intelligent industry, the company’s Q1 performance increased steadily.
Anchor the development tracks of new infrastructure, new energy and industrial digital intelligence, and further open the growth space of core technologies in products: in the field of optical communication, consolidate the wireless network market, consolidate the advantageous position of 50g optical module in the front, middle and return markets, and the Internet manufacturer resource pool at the head of digital communication products. With the recovery of the demand for optical modules and the steady increase of the demand for small base stations, the optical communication business will achieve steady growth; In the field of new energy vehicles, PTC heating system has made continuous innovation and breakthrough around the pain points of the industry, realizing the full coverage of China’s well-known automobile enterprises and new forces in vehicle manufacturing. With the improvement of the company’s sensor core technology capability, the product matrix is rich and the business driving force is full.
Profit forecast and investment rating: with the implementation of school enterprise restructuring in 2021, the business sectors such as optical communication and sensors will continue to grow steadily. Based on the latest Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) tracking and operation, we will reduce the net profit attributable to the parent company from 1.139 billion yuan and 1.304 billion yuan to 1.016 billion yuan and 1.283 billion yuan from 2022 to 2023. It is expected that the net profit attributable to the parent company in 2024 will be 1.541 billion yuan, and the EPS from 2022 to 2024 will be 1.01/1.28/1.53 yuan respectively, The PE valuation corresponding to the current stock price is 20.83/16.48/13.73x respectively. With the steady progress of new energy vehicles and optical communication industry, we continue to be optimistic about the steady growth of Huagong Tech Company Limited(000988) future performance and maintain the “buy” rating.
Risk tip: the progress of laser business is less than expected, and the development of new energy vehicles is less than expected.
