\u3000\u3 Shengda Resources Co.Ltd(000603) 859 Nancal Technology Co.Ltd(603859) )
Key investment points
Event: the company released its annual report for 2021. The company achieved annual revenue of 1.14 billion yuan, a year-on-year increase of 19.9%; The net profit attributable to the parent company was 160 million yuan, a year-on-year increase of 29.7%. The main reason is that the company has strengthened the development of intelligent manufacturing business, and the overall business scale has achieved rapid growth.
Increased investment in intelligent manufacturing and rapid growth in business scale. With the continuous promotion of “made in China 2025” strategy, the market prospect of intelligent manufacturing is broad. The company actively grasps the opportunity of national policy support and the increasing demand for digital construction of industrial customers, formulates long-term development plans, and strengthens the development of intelligent manufacturing business. The company’s investment has achieved remarkable results. In 2021, the company’s operating revenue increased by 19.9% year-on-year, mainly due to the rapid growth of the scale of intelligent manufacturing business. The operating revenue of intelligent manufacturing business increased by 28.9% year-on-year, and its proportion in the total operating revenue increased from 53.5% in 2018 to 87.8%.
Policies have boosted the development of the industry and significantly increased downstream demand. Driven by the national supply side reform and other policies, the demand in the field of industrial manufacturing continued to recover, and China’s transformation to a manufacturing power further gave birth to the market demand for intelligent manufacturing in the manufacturing field. According to the data of prospective industry research institute, it is expected that China’s intelligent manufacturing industry will maintain an average annual compound growth rate of about 10% in the next few years. The development of intelligent manufacturing industry has brought broad space for medium and Taiwan businesses such as solutions and platform ecology. It is expected that the total scale of medium and Taiwan market will maintain rapid growth from 2020 to 2025, with an average annual compound growth rate of about 60%.
Self research of products was promoted in an orderly manner, and the industry market was actively explored. As a national high-tech enterprise, the company continues to invest in product technology research and development, and the self-development of products is progressing smoothly. In 2021, the company released three types of self-developed products: apaas product Lechang productivity middle platform, cloud service platform product post factory manufacturing and data management platform. In terms of industry market expansion, the company focuses on civil fields such as large consumer goods, new energy and process manufacturing industries; In terms of regional market development, the company continues to focus on accelerating business development in South and East China and building southwest and northwest regional centers, and actively expand business in overseas markets.
Profit forecast and investment suggestions. It is estimated that the EPS from 2022 to 2024 will be 1.28 yuan, 1.70 yuan and 2.16 yuan respectively, and the net profit attributable to the parent company will reach a compound growth rate of 31.2% in the next three years. The policy and downstream demand are favorable, and the intelligent manufacturing industry is booming. The company focuses on investment in the field of intelligent manufacturing, actively constructs an intelligent manufacturing middle platform, gives a 35 times valuation in 2022, corresponding to the target price of 44.80 yuan, covers it for the first time, and gives a “buy” rating.
Risk tips: downstream demand is less than expected, market competition intensifies, and the company’s technology research and development is less than expected.
