\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 51 Zhejiang Yonggui Electric Equipment Co.Ltd(300351) )
[key points of investment]
The performance in 2021 increased steadily. According to the annual report of 2021 disclosed by the company, the revenue in 2021 was 1.149 billion yuan, a year-on-year increase of 9.08%, the net profit attributable to the parent was 122 million yuan, a year-on-year increase of 16.43%, and the net profit deducted from non net profit increased significantly by 65.32% to 1.097 billion yuan. Corresponding to the revenue of 380 million yuan in the single quarter of 2021q4, an increase of 21.34% year-on-year and 25.91% month on month. The net profit attributable to the parent company in the single quarter of Q4 was 32.13 million yuan, an increase of 6.18% year-on-year and a slight decrease of 1.5% month on month.
Rail transit business has made steady progress. The company has been deeply engaged in the field of rail transit for many years and occupies a leading position in the subdivision field of rail transit connectors in China. It provides customers such as Crrc Corporation Limited(601766) , China National Railway Group with diversified rail transit product solutions including connectors, door systems, shock absorbers, etc. According to the statistics of the State Railway Group, by the end of 2021, the operation history of high-speed railway has reached 40000 kilometers, and the investment in railway fixed assets has totaled 748.9 billion yuan in 2021. In 2021, the company’s business segment achieved a revenue of 678 million yuan, a year-on-year increase of 6.94%. Through the accumulation and innovation of new technologies, we can help the rapid release of new products in the market.
The new energy vehicle business has achieved rapid growth. Under the background of the rapid development of the new energy vehicle industry, relying on the accumulated high-quality technologies and products, the company continues to deepen the strategic cooperation with customers and provide customers with overall solutions for high-voltage and high current interconnection including vehicle mounted and charging gun applications. Its products include high-voltage connectors and harness components, PDU / BDU, charging / exchange interface, high-power liquid cooled DC charging gun, etc., and have entered the supply chain system of front-line main engine manufacturers including Byd Company Limited(002594) , Geely, great wall, SAIC, FAW and so on. In 2021, the company’s new energy vehicle business revenue was 352 million yuan, with a significant year-on-year increase of 81.42%.
Military industry, aerospace and energy information business are in the ascendant. The company’s military and aerospace sectors are equipped with various special equipment developed by China’s 11 major military industrial groups, including military circular electrical connectors, RF connectors, optical fiber connectors, deep-water connectors, etc. Energy information products are mainly used in communication base stations and various communication network equipment and energy storage equipment. Services include Huawei, ZTE, Datang and other customers.
Basic technology and product research and development continue to win. In 2021, the company invested 94.97 million yuan in R & D, accounting for 8.27% of revenue. As of December 31, 2021, the company has 538 patents, including 68 invention patents. The speed of new product development has been accelerating, and projects such as “liquid cooled high-power charging gun project”, “high-speed backplane communication connector”, “modular configuration jumper box integrated R & D project for rail transit” have been completed, providing leading technical support for businesses in all sectors.
[investment suggestions]
The company has been deeply engaged in the field of high-voltage connectors for many years, expanding from rail transit and military business to new energy vehicle business. It has a complete technical layout in high-voltage and high-current connectors and harness components, high-power liquid cooled DC charging guns and other core products, has accumulated rich experience in product R & D and manufacturing, and has expanded many domestic and joint venture first-line main engine plants. Benefiting from the continuous growth of new energy vehicles and charging supporting systems, it is estimated that the company’s revenue from 2022 to 2024 will be RMB 1491 million, RMB 1933 million and RMB 2677 million respectively, the net profit attributable to the parent company will be RMB 155 million, RMB 211 million and RMB 265 million respectively, the corresponding EPS will be RMB 0.40, 0.55 and 0.69/share respectively, and the corresponding current PE will be 28, 20 and 16 times respectively, so it is rated as “overweight”.
[risk tips]
The penetration rate of new energy vehicles and charging piles is lower than expected
The promotion of new products is less than expected
The price of upstream raw materials continued to rise
