\u3000\u3 Shengda Resources Co.Ltd(000603) 982 Nanjing Chervon Auto Precision Technology Co.Ltd(603982) )
Event: Recently, the company announced its 2021 annual performance express. The company expects to achieve an operating revenue of 1.615 billion yuan in 2021, with a year-on-year increase of 16.53%; The net profit attributable to the parent company was 122 million yuan, a year-on-year increase of 0.81%; The net profit deducted from non parent company was 90 million yuan, a year-on-year decrease of 19.9%.
The revenue increased year-on-year, the proportion of transmission and new energy business further increased, and the profit side growth rate was lower than expected due to many factors. The company’s revenue in 2021 increased by 16.5% year-on-year, mainly due to the company’s advance layout in the field of new energy auto parts and the improvement of the market penetration of transmission parts business. According to the announcement data, the proportion of new energy auto parts and auto transmission parts business in 2021 was about 35.0% and 20.0% respectively, up 5.0% and 3.7% respectively compared with 2020, and the product structure continued to be optimized. The year-on-year decline in net profit after deduction from non parent company is mainly due to the sharp rise in raw material prices, the rapid rise in international shipping charges, the appreciation of RMB and other factors.
The business strategy is stable, and the medium and long-term growth logic of the two core businesses of transmission and new energy remains unchanged. The development path of the company is clear, with the transmission business as the bottom line and the new energy vehicle parts business as the growth line. (1) Transmission business: DCT valve sector is an advantageous product of the company. In addition to supporting independent vehicle enterprises mainly through BorgWarner, the company also received direct supply orders from customers such as Byd Company Limited(002594) , great wall and so on. Benefiting from the increased penetration of independent DCT, the company’s transmission business will maintain high growth. (2) New energy business: the company has been deeply engaged in the field of new energy for many years and has strong technical R & D strength. At present, the company’s products have covered the three electricity system, with full orders on hand. With the release of production capacity, the new energy business will increase rapidly.
Accelerate the integrated die casting of layout and open up new space for development. The integrated die casting scheme is a new track for the innovation of aluminum die casting industry. The company has technical reserves in large new energy aluminum castings and purchased large tonnage die casting machines for layout earlier. At present, large die casting machines are mainly used for “multi in one” components, battery components and body components. According to the announcement information, the company’s 5000t die-casting machine has been put into use and mass production, and 6000t and 8000t die-casting machines will also come to the factory one after another.
Profit forecast and investment rating: we are optimistic about the company’s market competitiveness and high growth in core businesses such as new energy and transmission parts. Taking into account the impact of the rise in raw material prices and freight charges, we adjusted the company’s net profit attributable to the parent company from 2021 to 2023 to be RMB 122, 201 and 315 million respectively (original values of RMB 162, 247 and 334 million), and the corresponding EPS were RMB 61, 1.00 and 1.57 respectively (original values of RMB 0.81, 1.23 and 1.66). The closing price on April 6, 2022 corresponds to the PE value from 2021 to 2023, which is 39, 24 and 15 times respectively. Maintain a “strongly recommended” rating.
Risk warning: the sales volume of passenger cars is lower than expected; Price rise of upstream raw materials; The recovery of missing core is not as expected; The construction progress of new production capacity is less than expected.
