\u3000\u3 China Vanke Co.Ltd(000002) 179 Avic Jonhon Optronic Technology Co.Ltd(002179) )
Event: the company released its annual report for 2021. During the reporting period, the operating revenue was RMB 12.867 billion, a year-on-year increase of 24.86%, and the net profit attributable to the parent was RMB 1.991 billion, a year-on-year increase of 38.35%.
Revenue maintained rapid growth and gross profit margin further improved. The revenue growth of the company's three main businesses, electrical connectors and integrated components, optical devices and optoelectronic equipment, fluid and dental products, were 23.78%, 22.86% and 51.45% respectively, up 14.63pct, 0.07pct and 22.24pct compared with last year; The gross profit margin was 40.99%, 23.83% and 31.65% respectively, up 0.02pct, 4.70pct and 0.59pct compared with last year. The construction of national defense informatization has accelerated the demand for defense products, and the increase in the penetration of new energy vehicles has opened the vehicle connector market. The company has strong sales of defense and new energy vehicle connectors, which has promoted the rapid growth of revenue. Defense products are of high value, accounting for a large proportion in the company's product structure, and the cost reduction caused by scale effect has steadily increased the company's gross profit margin.
The change of military product delivery rhythm and expense provision led to a decline in the growth rate of revenue and profit in the fourth quarter. The operating revenue and net profit of the company in the fourth quarter were 2.990 billion yuan and 369 million yuan respectively, with a year-on-year increase of 13.31% and 8.27%, lower than the annual average level. At present, the delivery rhythm of the military industry is ahead of schedule. Accordingly, the delivery of the company's defense products is mostly concentrated in the first three quarters, resulting in a lower growth rate of revenue in the fourth quarter than in the first three quarters. In the fourth quarter, the company carried out the annual salary calculation. Various expenses were accrued, and the proportion of the highest and high-value defense products in the annual revenue decreased, resulting in the profit growth rate lower than the annual average level.
Contract liabilities and inventories increased significantly compared with the beginning of the year, laying a foundation for high future performance. The company's contractual liabilities were 1.03 billion yuan, an increase of 246.00% over the beginning of the period. The ending inventory was 4.729 billion, an increase of 69.41% over the beginning of the period. The substantial increase in contract liabilities and inventories indicates that the downstream demand of the company is strong and urgent. The company actively prepares production to ensure the smooth delivery of products and lay a foundation for high performance in the future.
Raised investment projects are gradually implemented, and the release of production capacity helps the performance climb to a new peak. The optoelectronic technology industrial base (phase II) is expected to be completed and reach production this year, the first and second phases of the South China industrial base project are expected to reach production in 2023 and 2025 respectively, and the basic device industrial park project (phase I) is expected to reach production in 2024. With the release of production capacity year by year, the company's performance is expected to reach a new peak.
Investment suggestion: during the 14th Five Year Plan period, the informatization of military equipment was accelerated and the application market of new energy vehicles was opened. We predict that the net profit of the company from 2022 to 2024 will be 2.644 billion yuan, 3.41 billion yuan and 4.075 billion yuan respectively, and the corresponding PE will be 34.9, 27.1 and 22.6 respectively. For the first time, give a "overweight" rating.
Risk tip: the delivery rhythm of military products has slowed down, and the price of connectors for new energy vehicles has fallen sharply.
