\u3000\u3 Shengda Resources Co.Ltd(000603) 267 Beijing Yuanliu Hongyuan Electronic Technology Co.Ltd(603267) )
Event: the company released its annual report for 2021, and achieved a revenue of 2.403 billion yuan in 2021, with a year-on-year increase of 41.36%; The net profit attributable to the parent company was 827 million yuan, a year-on-year increase of 70.09%.
High performance growth for two consecutive years and continuous improvement of on hand orders
In 2021, the revenue reached 2.403 billion yuan, a year-on-year increase of 41.36%; The net profit attributable to the parent company was 827 million yuan, with a year-on-year increase of 70.09%, basically reaching the upper limit of performance forecast. During the period, the expense rate of the company was 10.75%, with a year-on-year decrease of 0.09pct, of which the R & D expense was 80.64 million yuan, with a significant year-on-year increase of 78.7%. The R & D expense rate reached a new high in recent years, laying a foundation for sustainable development in the future. In terms of profit margin, the gross profit margin was 51.51%, with a year-on-year increase of 4.76pct; Roe was 28.17%, with a year-on-year increase of 7.34pct. Highly reliable products grew rapidly, and the overall profitability of the company was significantly improved.
At the end of the balance sheet, the inventory was 415 million yuan, with a year-on-year increase of 93.25%, including goods in stock + 106%, raw materials + 85% and products in process + 75%, indicating that the company has sufficient orders and production scheduling. At the end of the cash flow statement, the net operating cash flow reached 533 million yuan, a significant year-on-year increase of 247.8%, mainly due to the significant increase in the scale of revenue and the better collection of downstream customers.
The gross profit margin of self-produced business remains high, and the missile elasticity promotes the sustainable development of self-produced business
In 21 years, the company’s self-produced business achieved a revenue of 1.348 billion yuan, with a year-on-year increase of 52.07%, including filter revenue of 19.8 million yuan, with a year-on-year increase of 82%, microwave product revenue of 13.66 million yuan, and significant breakthroughs in new categories; The gross profit margin was 80.83%, with a year-on-year increase of 0.93pct, and the gross profit margin remained high. By the end of 2021, the Suzhou production line of the company’s raised investment project was completed, and the production capacity is expected to be gradually released, laying the foundation for the comprehensive serialization, localization and industrialization of core products from materials to products. In terms of military products business, the downstream demand has increased significantly since the second half of 2020, and the company’s performance has increased rapidly for two consecutive years. It is speculated that the military MLCC market has increased significantly. We believe that with the gradual release of downstream customer capacity, orders are expected to rise again, and the company’s self-produced business may show a sustained and rapid growth trend.
The prosperity of new energy is rising, and the agency business may continue to develop
The company’s agent business products are mainly electronic components produced by China’s internationally renowned manufacturers, and the sales are concentrated in civil fields such as new energy and consumer electronics. Benefiting from the high prosperity of new energy photovoltaic and new energy automobile industries, the company’s agency business achieved a revenue of 1.043 billion yuan in 21 years, a year-on-year increase of 29.13%; The gross profit margin was 13.14%, with a year-on-year increase of 3.06pct. In the future, based on the existing brand cooperation, the company will gradually realize the diversification and specialization of brands, continue to strengthen the introduction of active components, and develop into the field of high value-added products.
Profit forecast: To sum up, as the core supplier of China’s military MLCC, the company’s self-produced business is expected to fully benefit from the demand driven by the leapfrog weapons and equipment in the 14th five year plan. It is expected to continue to produce large quantities in the next 3-5 years, the civil products agency business is expected to continue to grow rapidly, and the new category microwave business may achieve significant breakthroughs. Due to the large base of self-produced business, according to the principle of prudent prediction, we will adjust the operating revenue from RMB 3.703/4.847 billion to RMB 3.274/4.165 billion in 202223 and RMB 5.149 billion in 2024; The net profit attributable to the parent company was adjusted from RMB 1.266/1.700 billion to RMB 1.173/1.607 billion and RMB 2.05 billion in 2024; The corresponding EPS is 5.05/6.92/8.82 yuan and the corresponding PE is 24.57/17.93/14.06x, maintaining the “buy” rating.
Risk warning: the risk of price reduction of military products; Risk of changes in downstream market demand of agency business; The development of microwave business is less than expected
