\u3000\u3 China Vanke Co.Ltd(000002) 270 Huaming Power Equipment Co.Ltd(002270) )
The company's performance grew steadily in 2021, and the overseas market and maintenance service business performed well. On April 8, the company released the performance express of 2021. In 2021, the operating revenue was 1.532 billion yuan, a year-on-year increase of + 12%, and the net profit attributable to the parent was 417 million yuan, a year-on-year increase of + 45%. After deducting the non recurring profits and losses such as the income from the sale of Brazilian power projects, the net profit attributable to the parent was 180 million yuan, a year-on-year increase of + 21%. The company's core power equipment business achieved annual revenue of 1.177 billion yuan, a year-on-year increase of + 18%, of which the overseas market and maintenance service business contributed an important structural increment. The company's annual overseas revenue reached 161 million yuan, a year-on-year increase of + 22%, and the maintenance service business revenue reached 90 million yuan, a year-on-year increase of + 72%.
The company had a good start in 2022, and the performance in the first quarter is expected to increase by more than 40% year-on-year. On April 8, the company also released the performance forecast for the first quarter of 2022. Q1 is expected to realize the net profit attributable to the parent company of 60-75 million yuan, a year-on-year increase of 40.46% - 75.58%, deducting the net profit not attributable to the parent company of 58.5-73.5 million yuan, a year-on-year increase of 45.06% - 82.25%. In the context of certain pressure on the macroeconomic situation, we expect that the power grid investment in 2022 will become an important starting point for "steady growth", and the company's transformer tap changer business is expected to fully benefit from the growth of power grid investment. At the same time, with the acceleration of electric energy substitution under the background of double carbon, large industrial users such as polysilicon and steel also have strong demand for user side transformation and distribution. The off grid market may become an important factor driving the growth of tap changer demand of the company.
The Growth Logic of the company continues to be fulfilled, and the fixed growth completed by major shareholders shows development confidence. The company focuses on the subdivided field of transformer tap changer, with deep competitive barriers. The Chinese market share is nearly 90% (calculated by the number of sales units), and the gross profit margin of products is more than 50% all year round. In recent years, the company has continued to increase investment in EHV / UHV, overseas business and maintenance service business, and the market development has been fruitful. It is expected that the growth center of the company's tap changer business is expected to move up significantly during the 14th Five Year Plan period. In March 2022, the company completed the non-public offering of a shares, and the controlling shareholder Huaming group subscribed for 137 million shares in full at RMB 500 million. After the issuance, the shareholding ratio of Huaming group increased from 28.25% to 33.34%. We believe that this issuance fully reflects the confidence of major shareholders in the future development of the company, and the financial structure of the company has also been significantly improved.
Investment suggestion: the demand of the tap changer industry is rising, and the company's leading position in China is stable. We expect the company to achieve operating revenue of RMB 1.532/1.742/2.071 billion and net profit attributable to the parent company of RMB 417/3.24/406 million from 2021 to 2023 respectively. After deducting non recurring profits and losses, the performance has improved steadily, maintaining the "Buy-A" investment rating. The six-month target price is RMB 9.00, corresponding to 25 times the P / E ratio in 2022.
Risk warning: power investment is less than expected, and overseas market expansion is less than expected
