\u3000\u3 China Vanke Co.Ltd(000002) 595 Himile Mechanical Science And Technology (Shandong) Co.Ltd(002595) )
Key investment points
Event: the company released its annual report for 2021. In 2021, it realized an operating revenue of 6.008 billion yuan, a year-on-year increase of 13.48%, a net profit attributable to the parent of 1.053 billion yuan, a year-on-year increase of 4.56%, and a net profit deducted from non attributable to the parent of 982 million yuan, a year-on-year increase of 2.57%; Slightly lower than market expectations.
In 2021, revenue maintained a steady growth trend, and the profitability was dragged down by the rise in bulk & shipping prices.
(1) growth analysis: in 2021, the company's revenue increased by 13.48% year-on-year, and the net profit attributable to the parent company increased by 4.56% year-on-year, maintaining a steady growth trend, mainly due to: ① the accelerated growth of tire mold business by 12.14%, and the rapid growth of large parts and machinery products by 16.94%; ② The global covid-19 epidemic continued and the epidemic prevention and control entered the normalization stage. Shipping costs and raw material prices rose sharply, putting great pressure on enterprises.
(2) profitability analysis: the gross profit margin of sales in 2021 was 28.53%, down 2.06 PCT year-on-year; This is mainly because the gross profit margin of large parts and machinery products decreased by 6.53pct due to the price rise of bulk raw materials and shipping costs. In 2021, the net profit margin of sales was 17.53%, down 1.49pct year-on-year, mainly due to the decline of expense rate during the period under the advantage of scale, in which the sales / management / financial expense rate was 1.11%, 2.52% and 0.85% respectively, up + 0.18pct, - 0.05pct and -0.21pct respectively year-on-year.
(3) analysis of operating capacity and operating cash flow: the company's operating capacity was further improved. In 2021, the company's accounts receivable turnover days were 99.11 days, a year-on-year decrease of 3.23 days; The net cash flow from operating activities reached 118 million yuan, which turned from negative to positive, which shows that the company's production and operation are stable.
(4) analysis of R & D Investment: as a national high-tech enterprise, the company attaches great importance to R & D innovation and has obtained a number of invention patents; In 2021, the company's R & D expenses reached 259 million yuan, with a year-on-year increase of 29.63%, accounting for 4.32% of revenue, with a year-on-year increase of 0.54 PCT.
(5) adhere to the active cash dividend policy and share the development achievements with investors. In 2021, the company maintained a strong return, and the profit distribution plan was a cash dividend of 300 million yuan, realizing the harmonious unity of the company's sustainable development and the reasonable return of shareholders.
In 2021, the global tire market continued to pick up, benefiting the company's tire mold business.
(1) the global tire market continues to pick up, the production and sales volume of China's tire industry continues to increase, and the demand for overseas orders rebounds rapidly. According to the data of the National Bureau of statistics, the output of rubber tire cover in China in 2021 was 899 million, a year-on-year increase of 10.8%. With the gradual liberalization of epidemic prevention and control policies in Europe, America and other countries, the demand for overseas orders of tires rebounded in 2021; According to the volume value of China's key export commodities in 2021 released by the General Administration of customs, 591.55 million new pneumatic rubber tires were exported in the whole year, with a year-on-year increase of 24.1% (this data includes all tire products such as bicycle tires, electric tires and special tires). We believe that the trend of multinational corporations' global procurement of molds will continue to develop, there is still room for the development of the international tire mold market, and there is still a certain potential in the market.
(2) the company's tire mold business is not afraid of challenges and maintains a good trend of steady development. The company further strengthened the in-depth cooperation with high-quality customers, and the demand for overseas orders of tire molds rebounded significantly; In 2021, the company's tire mold business realized a revenue of 3.357 billion yuan, a year-on-year increase of 12.14%. Under the circumstances of rising raw materials, rising shipping costs and other adverse factors, the company timely increased the reserve batch of low-cost raw materials, continued to independently develop special equipment, actively promoted automation, continuously innovated technology and processes, improved production efficiency, and realized a steady increase in gross profit margin; In 2021, the gross profit margin of the company's tire mold business was 36.08%, with a year-on-year increase of 1.57pct.
Under the background of carbon neutralization and carbon peak, large parts and machinery such as wind power and gas turbine are growing rapidly.
(1) there is still room for substantial growth of wind power in China during the 14th Five Year Plan period. According to the data released by the global energy Internet development cooperation organization, during the 14th Five Year Plan period, China plans to put into operation about 290 million kw of wind power projects. In 2025, the total installed capacity of planned wind power will reach 536 million kW (including about 500 million kw of onshore wind power), with an average annual increase of more than 50 million KW; Under the background of carbon neutralization and carbon peak, the development prospect of wind power is broad.
(2) the global gas turbine market will maintain growth. On the one hand, in the context of dual carbon, as an important peak shaving energy, gas turbine can effectively supplement wind power and photoelectric power; On the other hand, gas turbine can replace the old technology of thermal facilities operating on coal or oil, and because the carbon density of natural gas is lower than that of other traditional fuel types, government and business leaders hope to reduce the carbon footprint, which has stimulated the growth of gas turbine market to a certain extent. According to the information of prospective industry research institute, the scale of the global gas turbine market in 2021 is expected to be US $23.3 billion, with a year-on-year increase of 3.5%; It is estimated that the global gas turbine market will reach US $28.3 billion by 2026.
(3) the company's large parts and mechanical products are growing rapidly, and its profitability is under pressure due to the rise in the price of raw materials. The company mainly focuses on the casting and finishing of parts and components of energy products such as wind power and gas turbine. In 2021, the revenue of large parts and mechanical products of the company was 2.441 billion yuan, a year-on-year increase of 16.94%. Affected by the orders and price fluctuations of wind power parts business, the rise of raw material prices and other factors, the gross profit margin of the company's large parts and machinery products has declined; In 2021, the gross profit margin was 17.43%, a year-on-year decrease of 6.53pct.
Maintain the "overweight" rating. Taking into account the increase of the company's revenue of RMB 6.5 billion and RMB 6.9 billion in 2026.2 and RMB 6.9 billion in 2026.3, we expect to increase the company's revenue by RMB 7.2 billion and RMB 6.9 billion in 2026.3 and RMB 6.9 billion respectively in 2026.2; Year on year growth of 8.88%, 6.41% and 4.51% respectively; The net profit attributable to the parent company was 1.204 billion yuan, 1.324 billion yuan and 1.414 billion yuan respectively (the predicted value from 2022 to 2023 before adjustment was 1.366 billion yuan and 1.478 billion yuan respectively), with a year-on-year increase of 14.32%, 9.95% and 6.81% respectively; EPS is 1.23 yuan, 1.57 yuan and 1.72 yuan respectively (the predicted values from 2022 to 2023 before adjustment are 1.71 yuan and 1.85 yuan respectively); According to the share price on April 7, 2022, the corresponding PE is 12.4, 11.3 and 10.6 times respectively. As a leader in the tire mold industry, the company's revenue has continued to grow steadily; Under the background of carbon neutralization and carbon peak, large parts and machinery products such as wind power and gas turbine are expected to grow rapidly, thicken the company's performance and maintain the "overweight" rating.
Risk warning: the risk that the economic development is less than expected; Exchange rate fluctuation risk; The risk of intensified market competition; Risk of price fluctuation of raw materials; The uncertainty risk of New Coronavirus pneumonia.
