\u3000\u3 Guocheng Mining Co.Ltd(000688) 636 Chengdu Zhimingda Electronics Co.Ltd(688636) )
Event: on April 7, the company released its annual report for 2021, achieving an operating revenue of 449 million yuan, a year-on-year increase of 38.43%, and a net profit attributable to the parent company of 112 million yuan, a year-on-year increase of 30.30%.
In the first year of listing, the revenue and profit increased both, of which the revenue increased by 38.43%. The company achieved an operating revenue of 449 million yuan in 2021, with a year-on-year increase of 38.43%; The net profit attributable to shareholders of listed companies was 112 million yuan, with a year-on-year increase of 30.30%. We believe that the growth rate is in line with the development growth rate of the industry. According to the company’s announcement, the high increase in revenue is mainly due to the company actively grasping the development opportunities of the industry and strengthening market development. During the reporting period, the newly signed orders increased compared with the same period of last year (517 million yuan of orders on hand at the end of the reporting period), and the revenue scale continued to grow. The growth rate of net profit attributable to shareholders of listed companies was slightly lower than that of operating revenue, which was mainly due to the fact that in 2021, the company undertook a total of 26.16 million yuan of expenses arising from equity incentive. Excluding the impact of share based payment expenses, the company realized a net profit attributable to shareholders of listed companies of 133.75 million yuan during the reporting period, an increase of 56.28% over the same period of last year.
The revenue structure was continuously optimized, and the missile borne products increased by 138.46%. The company mainly provides customized embedded computer module products and solutions required in airborne, missile borne, shipborne, vehicle borne and other fields for customers in the military industry. The sales scale expanded, including the operating revenue of missile borne products increased by 138.46% and that of airborne products increased by 56.5% over the same period of last year. In terms of business, the company has provided more than 100 kinds of embedded computer solutions for airborne equipment and more than 40 kinds of embedded computer solutions for missile borne equipment, and the product coverage has been expanding. We believe that the rapid development of aviation and aerospace supporting products meets the development requirements of the military industry in the 14th five year plan. The rapid growth of missile borne products is conducive to optimizing the income structure and creating a new growth pole.
Operating cash flow increased significantly, and R & D expenses continued to increase. According to the announcement, during the reporting period, the net cash flow from the company’s operating activities increased by 135.13% compared with the same period last year, mainly due to the growth of the company’s income scale and the increase of annual cash collection compared with the same period last year. In 2021, the company’s R & D expenses increased by 68.39%, including 65 R & D personnel, an increase of 28.5%. In addition, the company’s accounts payable increased by 93.55% during the reporting period, mainly due to the increase in raw material procurement during the reporting period. We believe that in 2021, the company’s R & D expenses will increase significantly, the R & D personnel team will be actively expanded, and the company’s technical strength is expected to be further enhanced.
Increase the capital of Chengdu mingkesi micro to achieve coordinated development and enhance competitiveness. During the reporting period, the company invested 177.65 million yuan in its own cash to increase the micro capital of mingkesi and obtained a registered capital of 32.3 million yuan (corresponding to 34.99% equity of mingkesi after the micro capital increase). Chengdu mingkesi Microelectronics Technology Co., Ltd. is an enterprise focusing on the R & D and production of semiconductor integrated circuits, focusing on the design of analog chips and the provision of solutions. We believe that mingkesi micro has the historical opportunity to seize the rapid development of China’s integrated circuits and the autonomy of military electronics, and will coordinate with the advantages of Listed Companies in the industrial chain and enhance the core competitiveness of listed companies.
Investment suggestion: the company is a leading company in the subdivided field of military embedded computer, with profound technology accumulation and high level of product customization. It has achieved full coverage of airborne, missile borne, shipborne and vehicle mounted, or will significantly benefit from the loading capacity of models, and has long-term growth. It is estimated that the net profit of the company from 2022 to 2024 will be 161 million yuan, 250 million yuan and 320 million yuan respectively, with corresponding valuations of 27, 18 and 14 times respectively, maintaining the “Buy-A” rating.
Risk warning: the replacement of weapons and equipment is not as expected; Military customer demand was lower than expected.
