\u3000\u3 Guocheng Mining Co.Ltd(000688) 033 Beijing Tianyishangjia New Material Corp.Ltd(688033) )
Event: on the evening of April 7, the company released its annual report. In 2021, the company achieved an operating revenue of 671 million yuan, a year-on-year increase of 61.68%; The net profit attributable to the parent company was 175 million yuan, a year-on-year increase of 53.05%; The non net profit deducted was 167 million yuan, a year-on-year increase of 44.28%; Diluted earnings per share was 0.39 yuan / share, a year-on-year increase of 56%.
The business of carbon matrix composites has made great progress and achieved revenue of more than 100 million, driving the high growth of annual performance. In 2021, the company’s carbon matrix composite sector achieved an operating revenue of 142 million yuan, accounting for 21.18% of the operating revenue and a gross profit margin of 60.18%. The company’s strategy of taking new materials as the main line and carbon matrix composites as the second growth curve has achieved remarkable results. The production line of 2000 ton carbon carbon carbon composite products and phase I production line of preforms have been put into operation in Jiangyou Industrial Park. In terms of carbon carbon composite materials, the company relies on technology accumulation and efficient production scheduling to improve product competitiveness. The upstream cooperates closely with Chinese carbon fiber manufacturers, and the downstream strives to enter the supply system of photovoltaic silicon wafer manufacturers as soon as possible, which will further improve product revenue in the future. In terms of carbon ceramic composite materials, the company has formed products with comparable performance with competitive products and reached strategic cooperation with automobile enterprises. The industrialization of automobile carbon ceramic braking products after cost reduction is worth looking forward to. We believe that with the gradual release of the demand of the photovoltaic industry, carbon carbon composite products can be expected to inject growth momentum into the carbon based composite business sector during the year.
Powder metallurgy brake pads maintain stable profitability and continue to provide a safety cushion for the company’s performance. While vigorously expanding the business of new materials, the company continued to steadily promote the powder metallurgy brake pads for high-speed railway EMUs. During the year, the company’s powder metallurgy brake achieved a revenue of 420 million yuan, slightly higher than that in 2020, with a revenue contribution of 62.87%. Or affected by the repeated epidemic, the decline of high-speed railway operation rate and other factors, the gross profit margin of powder metallurgy brake business during the reporting period was 69.18%, down from previous years. In 2021, the cumulative investment in railway fixed assets dropped slightly, but the industry as a whole still developed steadily, with the railway operating mileage exceeding 150000 kilometers; Urban rail transit also develops rapidly with the acceleration of urbanization. We believe that under the national strategy of emphasizing carbon peak, carbon neutrality and high-quality development, the characteristics of green infrastructure investment are further strengthened. With its own core competitiveness, the company’s brake products are expected to provide a safety cushion for the company’s performance in the field of rail transit in the direction of green development for a long time.
Cut into the field of military industry, synergy appears, and continue to increase R & D to ensure core competitiveness. After the acquisition of Ruihe technology, the company officially entered the field of military aviation, with aviation large structural parts as the main products. In 2021, the company achieved a sales revenue of 735345 million yuan, contributing more than 10% of revenue and nearly 50% of gross profit margin. We believe that the rapid development of military and civilian aircraft during the 14th Five Year Plan period will support Ruihe technology to steadily achieve its performance commitment. During the reporting period, the company continued to maintain a high proportion of R & D investment, with R & D investment of 693751 million yuan, accounting for more than 10% of revenue. Relying on a number of invention patents and software copyrights, the company won the title of “little giant” in Beijing during the reporting period and was included in the list of “single champion of manufacturing industry” selected by the Ministry of industry and information technology. The company’s R & D innovation and operation and management ability are leading in the industry. We believe that it will continue to support long-term development with its core competitiveness in the future.
Investment suggestion: we believe that the development of the company’s main business will be sustained and stable. In the medium term, relying on new materials such as carbon and carbon ceramics, we will lay out new tracks with high growth, cultivate military business for a long time, enhance comprehensive competitiveness, and achieve stable performance growth. With the steady growth of the company’s traditional business and the development of new materials business, we expect to realize the net profit attributable to the parent company of RMB 377 / 533 / 618 million from 2022 to 2024, with the corresponding EPS of RMB 0.84/1.19/1.38 and PE of 20 / 14 / 12 times, maintaining the “recommended” rating.
Risk warning: the risk of railway investment is less than expected, and the risk of new business development is less than expected.
