\u3000\u3 Guocheng Mining Co.Ltd(000688) 499 Guangdong Lyric Robot Automation Co.Ltd(688499) )
Event overview
The company issued the annual report of 2021. In 2021, the company realized an operating revenue of 2.331 billion yuan, a year-on-year increase of + 63.04%; The net profit attributable to the parent company was 212 million yuan, a year-on-year increase of 51.18%, and the net profit deducted from non attributable to the parent company was 205 million yuan, a year-on-year increase of 64.13%.
Analysis and judgment:
Both revenue and profit increased, and the lithium battery equipment business expanded rapidly. Benefiting from the high outlook of the downstream industry and the company’s strong product power and delivery capacity, the company’s revenue and net profit attributable to the parent company increased significantly in 2021. In terms of products, the company’s lithium battery manufacturing equipment business revenue in 2021 was 2.137 billion yuan, a year-on-year increase of + 79.65%, and the proportion of revenue increased by 8.48 PCT to 91.65% year-on-year; The revenue of auto parts manufacturing equipment business was 38 million yuan, a year-on-year increase of + 29.80%, and the proportion of revenue decreased by 0.42 PCT to 1.62% year-on-year; The revenue of manufacturing equipment in other fields was 75 million yuan, with a year-on-year decrease of – 49.02%, and the proportion of revenue decreased by 7.10 PCT to 3.23% year-on-year; Accessories and value-added revenue was 75 million yuan, a year-on-year increase of + 53.19%, and the proportion of revenue decreased by 0.21 PCT to 3.23% year-on-year.
The profitability remains stable and is expected to be further enhanced in the future. In 2021, the company’s gross profit margin was 38.52%, with a year-on-year increase of 0.19pct. In terms of products, the gross profit margin of the company’s lithium battery manufacturing equipment business was 39.40% in 2021, with a year-on-year increase of 2.03 PCT, mainly due to the large-scale and standardized production and sales of the company’s lithium battery equipment; The gross profit margin of auto parts manufacturing equipment business was 26.61%, a year-on-year decrease of 6.28pct; The gross profit margin of manufacturing equipment in other fields was 23.09%, a year-on-year decrease of 13.08pct; The gross profit margin of accessories and value-added services was 40.82%, a year-on-year decrease of 10.40pct; As the company continues to increase R & D and the sales expenses caused by the rapid expansion of business scale, the company’s net profit margin decreased by 0.71 PCT to 9.11% in 2021. Looking forward to the future, downstream battery manufacturers have a strong demand for lithium battery equipment, the company’s downstream bargaining power is expected to be improved, and the gross profit margin is expected to maintain a high level. At the same time, with the improvement of the company’s per capita output value, the expense rate is expected to decline, pushing up the net interest rate.
R & D investment continues to increase, and the horizontal expansion of new fields opens up new growth space. In 2021, the company’s R & D expenses reached 273 million yuan, a year-on-year increase of + 66.71%, and the R & D expense rate increased by 0.22pct to 11.70% year-on-year. It mainly invested in the field of high-end intelligent equipment of new energy, and carried out R & D on innovative projects such as winding, lamination control technology, laser technology application, intelligent warehousing and logistics system, digital platform and intelligent manufacturing. In 2021, there were 488 patent applications, including 171 invention patents. In that year, 371 authorized patents were obtained, including 65 invention patents. In addition, the company actively develops high-quality customers in auto parts, ICT, photovoltaic, hydrogen energy and other industries, improves its position in the intelligent manufacturing equipment industry and opens up new growth space.
Orders are expected to grow rapidly and the layout of relevant production capacity is perfect. The company has established long-term and stable cooperative relations with well-known battery manufacturers such as honeycomb energy, ATL, catl, BYD, Gotion High-Tech Co.Ltd(002074) , Sunwoda Electronic Co.Ltd(300207) and signed cooperation agreements with Byd Company Limited(002594) , honeycomb energy in June and August 2021 respectively, which has continuously improved its position in the supply chain system of various enterprises. In 2021, the company obtained contract orders and notification of award of about 7.042 billion yuan (including tax), of which the orders of power lithium battery equipment accounted for a higher proportion than we expected. With the continuous improvement of the penetration rate of new energy vehicles, the new capacity of battery manufacturers is expected to remain high in the next few years, raising the demand for lithium battery equipment, and the company’s new orders are expected to maintain high growth. In 2021, the company achieved capacity expansion by increasing plant area and expanding production personnel. On the one hand, the company expands its production capacity by adding new leased sites and new assembly workshops, and the company’s IPO raised investment project is expected to gradually contribute to the production capacity in 2023. On the other hand, the company actively introduces all kinds of talents. By the end of 2021, the company has 6496 employees (excluding interns), an increase of more than 1900 compared with the end of 2020.
The proposed issuance of convertible bonds will help the extension of products, and the competitiveness of products is expected to be further enhanced. The company plans to issue convertible bonds to unspecified objects, and the total amount of funds raised will not exceed 950 million yuan. After deducting the issuance expenses, the funds raised will be used for the industrialization project of special machines in the front and middle of lithium batteries and complete sets of equipment in the whole line and supplement working capital, which will help further improve the order delivery capacity and product competitiveness of the company: 1) the company has coating machines, die-cutting machines, laminating machines, winding machines, cell assembly lines For many process modules involved in battery assembly line, this fund-raising can significantly improve the delivery capacity of the company’s whole line equipment and enrich the company’s product series; 2) The company will further improve the supply capacity of front and middle section equipment such as coater, lamination / winding machine and undertake the demand of new orders. According to the announcement of the company, it is expected that after the completion of the project for the first time, it will realize an operating revenue of 2.758 billion yuan and a net profit of 350 million yuan. It is expected that the after tax internal rate of return will be 15.71% and the after tax static investment payback period will be 8.97 years.
Investment advice. We slightly adjusted the profit forecast for 202223, raised the revenue in 202223 from 4.556/6.012 billion yuan to 4.706/6.629 billion yuan, and increased the revenue forecast for 2024 by 8.934 billion yuan; The net profit attributable to the parent company in 202223 increased from 467 / 748 million yuan to 482 / 804 million yuan, and the forecast for 2024 increased by 1.139 billion yuan; In 202223, EPS increased from 5.30/8.50 yuan to 5.47/9.14 yuan respectively, and the forecast for 2024 increased by 12.95 yuan, corresponding to the closing price of 174.68 yuan / share on April 7, 2022. PE in 202224 was 32 / 19 / 13 times respectively, which has not been rated yet.
Risk tip: product R & D is less than expected, the prosperity of downstream industries is less than expected, and the fund-raising progress of convertible bonds to be issued is less than expected.
