\u3000\u30 Zhongyan Technology Co.Ltd(003001) 14 Zhonghang Electronic Measuring Instruments Co.Ltd(300114) )
Event: the company released its annual report for 2021, with an operating revenue of 1.943 billion yuan, a year-on-year increase of 10.39%; The net profit attributable to the parent company was 307 million yuan, a year-on-year increase of 16.95%; The net profit deducted from non parent company was 289 million, with a year-on-year increase of 13.81%, and the basic EPS was 0.52 yuan.
The performance growth was lower than expected, and the Q4 performance fell on the same / month on month basis. In 2021, the operating revenue of the company was 1.943 billion yuan (YoY + 10.4%), and the net profit attributable to the parent company was 307 million yuan (YoY + 16.9%). The performance growth was lower than expected, among which the decline of intelligent transportation business was higher than expected.
1) in the fourth quarter, in a single quarter, the company’s Q4 revenue was 398 million yuan (yoy-7.53%), and the net profit attributable to the parent company was 40 million yuan (yoy-4.61%). The double decline in revenue and performance in a single quarter was rare, partly due to the impact of the local epidemic on product delivery.
2) in terms of business segments, the sales volume of aviation and military products in the current period increased by 40.03% year-on-year. However, due to revenue recognition, the segment realized revenue of 498 million (YoY + 24.22%), of which Hanzhong 101 revenue was about 330 million (YoY + 27.4%), and the growth rate was basically in line with expectations; The civil products business flourished in many places, with the revenue of the sensing and control sector of 1.045 billion (YoY + 31.22%), of which the consumer electronics and logistics sensor business doubled, better than expected; Affected by the policies of automobile testing industry, the revenue of intelligent transportation sector is 359 million (yoy-31.7%), which is expected to continue to decline by about 20% in 2022, and may stabilize and recover in 2023.
The sales of related party transactions increased by 46%, highlighting the high prospect of military business. In 2022, the company expects the total amount of related party transactions of selling goods and providing labor services with the aviation industry or its controlled subsidiaries to be RMB 600 million, with a year-on-year actual amount of 411 million in 2021, an increase of 46%. As most related party transactions belong to military business, the sales of related party transactions increased by 46%, highlighting the high prospect of the company’s military business, and the rapid growth of revenue can be expected.
The stock repurchase is completed, and the second phase of employee incentive is on the way. Following the first phase of the employee stock ownership plan, the second phase of the company’s incentive plan is also brewing. As of February 7, 2022, the company has repurchased 4.691 million shares of the company, accounting for 0.79% of the total share capital. The average transaction price is about 13 yuan, and the total transaction amount is 60.81 million yuan. The repurchased shares will be used for employee incentive. We believe that the company’s long-term incentive and restraint mechanism is conducive to fully mobilize the enthusiasm of the company’s senior managers and core backbone personnel, and help the company’s long-term development,
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 341 million yuan, 431 million yuan and 555 million yuan respectively, and the EPS will be 0.58 yuan, 0.73 yuan and 0.94 yuan respectively. The corresponding PE of the current stock price is 23x, 18x and 14x, maintaining the “recommended” rating.
Risk tip: the downstream demand of military products is less than expected, the capacity expansion is less than expected and the industry policy is expected to be unfavorable.
