\u3000\u3 Guocheng Mining Co.Ltd(000688) 800 Suzhou Recodeal Interconnect System Co.Ltd(688800) )
Event: on April 8, 2022, the company issued its annual report for 2021. In 2021, the company realized an operating revenue of 902 million yuan, a year-on-year increase of 47.73%, and a net profit attributable to the parent company of 114 million yuan, a year-on-year increase of 54.65%.
Comments: optimistic about the increasing penetration of new energy vehicles, the company’s accelerated layout of new production capacity, and the company’s development prospects in the field of new energy vehicles can be expected. After years of technological innovation and market expansion, the company has formed a rich product line in the supporting market of new energy vehicles, and has successfully obtained the first-class supplier qualification of world-famous automobile enterprises and automobile electronic system integrators and supplied in batches. Its main customers include American T company, Weilai automobile, Saic Motor Corporation Limited(600104) , Chongqing Changan Automobile Company Limited(000625) , Chery Automobile, Contemporary Amperex Technology Co.Limited(300750) , Guangzhou Great Power Energy&Technology Co.Ltd(300438) , etc.
In 2021q4, the company achieved an operating revenue of 302 million yuan, a year-on-year increase of 93.73%, a month on month increase of 18.99%, a net profit attributable to the parent company of 42 million yuan, a year-on-year increase of 251.56%, a month on month increase of 21.77%, a gross profit margin of 26.14%, a year-on-year increase of 2.12pct and a month on month increase of 1.46pct, a single quarter high. In 2021, the company’s new energy vehicle market achieved an operating revenue of 691 million yuan, an increase of 131.75% over the same period of the previous year, accounting for 77.30% of the total operating revenue, an increase of 28.14 PCT over the same period of the previous year, and a gross profit margin of 24.67%, an increase of 2.46 PCT over the same period of the previous year. In terms of expenses, the company’s management expenses in 2021 were 29 million yuan, a decrease of 5.08% over the same period of the previous year, mainly due to the decrease in amortization of intangible assets. In 2021, the R & D investment of the company was 46 million yuan, and the iterative upgrading of technology was further carried out around improving the mechanical, electrical and environmental performance of products, with an increase of 50.95% over the same period of last year, accounting for 5.13% of operating revenue, and an increase of 0.11 PCT over the same period of last year. The sales volume of power replacement heavy trucks is growing rapidly. The company has technical advantages and is expected to benefit fully. At present, the business application mode of new energy heavy trucks has become more and more mature. From January to February 2022, 3223 new energy heavy trucks were sold, with a year-on-year increase of 1076.3%. With the continuous promotion of the dual carbon strategy, the trend of electric vehicle power exchange is obvious. Due to the advantages of high power replenishment efficiency, realizing the pressure of “vehicle power separation” mode to reduce customers’ purchase cost, energy conservation and emission reduction, the power exchange heavy card is popular in the market, which promotes the rapid rise of the demand for power exchange connectors. The company has a number of core technologies in terms of power replacement connectors, and the product layout is perfect, which is expected to fully benefit.
The penetration rate of new energy vehicles can be further improved, and the company can accelerate the expansion of production capacity. In 2021, the penetration rate of new energy vehicles has a clear trend, and there is a strong demand for supporting various connector products. Therefore, the company has reserved sufficient production capacity. (1) In 2021, the company actively promoted the construction of high-performance precision connector industrialization project, and the construction in progress increased by 55.55% compared with the end of last year. With the gradual implementation of projects under construction, the company’s production capacity is expected to increase significantly. (2) At present, the company has established two production bases in Suzhou and Mianyang to speed up the production capacity construction of the company’s supporting products in the field of new energy vehicles, so as to further expand the company’s production capacity and meet the demand gap of new energy vehicle business expansion.
Investment suggestion: with the rapid growth of the sales of power replacement heavy trucks and the increase of the demand for power replacement connectors, the company is expected to fully benefit. Therefore, the expected net profit attributable to the parent company in 2022 is raised from 192 million yuan to 210 million yuan. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 210 million, 310 million and 460 million yuan, maintaining the “overweight” rating.
Risk tip: the penetration rate of new energy vehicles is lower than expected, the sales volume of power replacement heavy trucks is lower than expected, and the capacity expansion is lower than expected
