\u3000\u3 Guocheng Mining Co.Ltd(000688) 187 Zhuzhou Crrc Times Electric Co.Ltd(688187) )
On March 29, Zhuzhou Crrc Times Electric Co.Ltd(688187) released its annual report for 2021. The company achieved annual revenue of 15.121 billion yuan, a year-on-year decrease of 5.69%; The net profit attributable to the parent company was 2.018 billion yuan, a year-on-year decrease of 18.49%; Deduct non net profit of RMB 1.522 billion, a year-on-year decrease of 18.74%.
Q4 performance meets expectations and is optimistic that it will rebound in 22 years. In the case of year-on-year decline in revenue in the first three quarters, Q4 achieved a revenue of 6.595 billion yuan, a year-on-year increase of 7.16%; It reflects that the proportion of Beijing Emerging Eastern Aviation Equipment Co.Ltd(002933) business revenue is steadily increasing, partially offsetting the impact of the decline in rail transit business. The gross profit margin of Q4 was 28.41%, down 9.72 percentage points from Q3, mainly due to: 1) the revenue confirmation of government orders is mostly concentrated in Q4, and the gross profit margin of Q4 is generally lower than that of the rest of the quarters due to audit adjustment and other factors; 2) The gross profit margin of urban rail transit is lower than that of locomotives and bullet trains, and the gross profit margin of Beijing Emerging Eastern Aviation Equipment Co.Ltd(002933) business is also lower than that of rail transit, so the overall gross profit margin has decreased.
The epidemic has affected the performance of rail transit business for 21 years, and it is expected to hit the bottom and rebound in 22 years. The company took the lead in the market share of rail transit traction system. Affected by the epidemic in 21 years, major customers such as China Railway Group reduced their investment budget, which affected the downstream demand of the company. The revenue of rail transit equipment of the company was 12.252 billion yuan, a year-on-year decrease of 11.8%. At present, it is expected that the dark time has passed for the business of bullet train high-speed railway traction system. The newly signed orders in the field of urban rail benefiting from non traction system have increased significantly, and the signal system also welcomes the record high orders. The company’s rail transit business will usher in new opportunities for development.
The strongest voice of China’s automobile grade IGBT and SiC has benefited from 22 years, and the climbing of phase 2 production line will meet the volume. The company’s business revenue increased by 2.668 billion yuan year-on-year. If consolidation is not considered, the revenue of the company’s time semiconductor subsidiary is 1.31 billion yuan, and the revenue does not include the contribution of phase 2 IGBT capacity. The company ranks first in rail transit + power grid IGBT market share in China, and it is expected that with the steady climbing of the company’s phase 2 IGBT production line, it is expected to gain a leading market share in new energy vehicles, photovoltaic, etc. At the same time, the company has advanced the clamping SiC, 3300v rail transit SiC module has reached the world-class level, and the vehicle specification SiC device has been applied to the independent electric drive.
Electric drives, sensors and other devices will continue to make efforts, which is expected to contribute new growth momentum. In the Beijing Emerging Eastern Aviation Equipment Co.Ltd(002933) business of the company, there are also some interesting points in the electric drive and sensor parts. In terms of electric drive, the company achieved a revenue of 456 million yuan in 21 years, with a year-on-year increase of 171.32%, ranking among the top 10 in the industry. The products are applied to Changan, Jiangling, Hezhong Nezha and other models. In terms of sensor parts, the delivery of the company increased by 320% year-on-year, ranking the first in China’s market share in the field of rail transit, ranking the forefront of the industry in the field of new energy vehicles, wind power and photovoltaic, and vehicle sensors also welcomed strong orders. In terms of photovoltaic inverter and wind power converter, the company delivered 3gw of wind power and 2gw of photovoltaic power in 21 years. Relying on the cost advantage and the background of state-owned enterprises, it is expected to usher in large-scale production in 2022.
Investment suggestion: we expect the net profit attributable to the parent company in 2022 / 23 / 24 to be RMB 2.295/27.55/3.139 billion respectively, and the corresponding current price (closing price of 2022.4.1) PE to be 34 / 28 / 25 times respectively. As the leader of China’s rail transit traction system, the company has strong capital and technical strength. At present, the company extends its layout to new energy IGBT and electric drive business. With strong technical advantages and capacity foundation, it will open up new performance growth points. Maintain a “recommended” rating.
Risk warning: the risk of technology iteration falling short of expectations / the risk of macroeconomic and industrial policy changes / the risk of IGBT business progress falling short of expectations.
