\u3000\u3 Guocheng Mining Co.Ltd(000688) 800 Suzhou Recodeal Interconnect System Co.Ltd(688800) )
Key investment points
Announcement summary: the company released the annual report of 2021. In 2021, the operating revenue was 902 million yuan, a year-on-year increase of 47.73%; The net profit attributable to the shareholders of the listed company was 114 million yuan, a year-on-year increase of 54.65%; After deducting non recurring profits and losses, the net profit attributable to shareholders of listed companies was 106 million yuan, a year-on-year increase of 59.95%; It is proposed to distribute a cash dividend of 3.20 yuan (including tax) for every 10 shares.
The annual revenue and profit reached a new high, and the new energy vehicle business increased significantly. The company’s Q4 single quarter revenue and net profit attributable to the parent company were 302 million yuan and 423669 million yuan respectively, both reaching a record high, with a year-on-year growth rate of 93.73% and 251.55% respectively, a month on month growth of 18.99% and 21.77% respectively, and the profitability was significantly improved. The annual performance was mainly driven by the expansion of market demand and the continuous growth of sales orders and production capacity. In terms of business, the new energy vehicle business achieved a revenue of 691 million yuan, a significant increase of 131.75% year-on-year, accounting for 76.65% of the total revenue, with a gross profit margin of 24.67%, a year-on-year increase of 2.46 PCT, and the scale effect initially appeared; Affected by the slowdown in 5g construction and the increase in the proportion of 700m base stations, the communication business revenue decreased by 49.38% year-on-year to 135 million yuan, and the gross profit margin decreased by 17.57pct to 14.81% year-on-year, mainly due to the sharp decrease in product output and insufficient equipment operation; Industrial and other connector business achieved a revenue of 684594 million yuan, a year-on-year increase of 60.83%, accounting for 7.65%. The company’s annual comprehensive gross profit margin was 24.49%, with a year-on-year decrease of 3.22pct, which was mainly dragged down by the rise in the price of upstream raw materials and the decline in the gross profit margin of communication connectors. The net profit margin was 12.62%, with a year-on-year increase of 0.74pct, reflecting the company’s good cost control ability. During the 21 years, the cost rate was 10.45%, with a year-on-year decrease of 2.44pct, and the sales / management / R & D / financial cost rates were 2.06% / 3.26% / 5.13% / – 0.07%, with a year-on-year change of -0.14pct / – 1.82pct/0.11pct / – 101, It is expected that with the stability of upstream raw material prices, the enhancement of scale effect of automobile business and the continuous strengthening of internal fine management, the profitability of the company will be gradually improved. In terms of products, in addition to high-voltage and high-current connectors and components and charging and replacement series connectors, the company added intelligent network connector series during the reporting period to enrich the product line of new energy vehicle supporting market. In the future, fakra, mini fakra, Ethernet connection, high-speed board to board connector and other high-speed and high-frequency connectors are expected to contribute to performance increment, and the company’s business has entered a high growth period.
Increase R & D investment, enhance innovation capacity, increase and expand production to break through the bottleneck of production capacity. The company adheres to R & D innovation and establishes technical competitive advantages. It has core technologies such as board to board RF connector, high voltage and high current connector and power exchange connector. In 2020, it was recognized as a national specialized and new “little giant” enterprise. In 2021, the company invested 462893 million yuan in R & D, an increase of 50.95% year-on-year, accounting for 5.13% of revenue, an increase of 0.11 PCT year-on-year. By the end of 2021, the company had 180 R & D teams, Accounting for 20.57% of the total number of employees, the company has obtained 171 patents in total. During the reporting period, the company established the enterprise central research institute to focus on cutting-edge technology, process and automation research, standardization and intellectual property management, enhance the overall planning ability of the company’s strategic products, and form a R & D standardization management system. At present, the company has established two production bases in Suzhou and Mianyang, radiating the markets of East China and southwest China respectively. Due to the rapid growth of demand for new energy vehicles, the company is facing a capacity bottleneck. Previously, it was expected to increase the production capacity of 1.6 million sets of new energy vehicle connectors in Mianyang base through IPO. In March 2022, the company announced a fixed increase plan and plans to raise 700 million yuan to build a new key parts and R & D center project of new energy vehicles in Suzhou, Among them, the key parts project of new energy vehicles is expected to invest 395 million yuan to raise funds, and achieve an annual production capacity of 12 million sets of new energy vehicle connector systems after reaching the production capacity. It is expected to achieve an annual new sales revenue of 600 million yuan and a net profit of 712523 million yuan. The project will improve the company’s production capacity in the eastern region and meet the rapid growth needs of the surrounding and overseas markets. At present, the application for fixed increase has been accepted by the Shanghai Stock Exchange.
In the field of power exchange and energy storage, high-frequency and high-speed connectors are progressing smoothly. Under the trend of electrification, intelligence and networking of automobiles, the consumption and value of high-voltage and high-frequency high-speed connectors per vehicle have increased significantly, becoming the main incremental market of automobile connectors. The company’s technical capacity and industrial status of high-voltage connectors are in the first echelon in China. It is looking forward to laying out new technology paths such as power exchange, fast charging and energy storage, and has become the leading supplier of related products in the power exchange industry, It is expected that the company’s power exchange business will continue to grow with the increase of the penetration rate of new energy passenger vehicles for electric vehicles and the recovery of the heavy truck market. Relying on the accumulation of communication RF connector technology, the company has actively arranged vehicle high-speed and high-frequency connectors, completed product development and cooperated with some customers. Technology and customers constitute two major barriers in the automotive connector industry. Tyco, Amphenol, MOLEX and other overseas manufacturers started earlier and entered the supply system of mainstream automobile manufacturers outside China earlier with the advantages of R & D investment and industrial scale, occupying a leading position. In recent years, due to the improvement of customized demand through automobile electrification and intelligent innovation, new opportunities for suppliers to enter have been brought, China’s independent brand automobile enterprises have risen in the field of new energy vehicles and moved their production capacity eastward. Domestic connector manufacturers have increased their market share in the field of new energy vehicles by virtue of their advantages in price, cost, quality and supply capacity, and the domestic substitution in the industry has accelerated Suzhou Recodeal Interconnect System Co.Ltd(688800) has entered the field of new energy earlier. At present, its customers include T company of the United States, Weilai, SAIC, Chang’an, Byd Company Limited(002594) , GAC, Xiaopeng, Daimler, Anhui Jianghuai Automobile Group Corp.Ltd(600418) , Nissan, Xiamen King Long Motor Group Co.Ltd(600686) and other vehicle manufacturers and Contemporary Amperex Technology Co.Limited(300750) , Huawei, Delphi and other three power manufacturers. It has the advantage of starting at a fixed point and fully benefits from the high growth of the industry as an industry leader.
Investment suggestion: Suzhou Recodeal Interconnect System Co.Ltd(688800) is the leader of China’s 5g base station RF and new energy vehicle high-voltage connector. It is prospectively arranged in the field of new energy vehicle power exchange and on-board high-speed and high-frequency connector. The performance inflection point appears in 2021q3, with broad growth space. Based on the smooth expansion of the company’s new customers and new products, we slightly raised the performance expectation. It is estimated that the company’s net profit in 20222024 will be 198 million / 304 million / 437 million respectively (the original forecast value of 22-23 years is 189 million / 293 million), and EPS will be 184 yuan / 2.81 yuan / 4.05 yuan respectively (the original forecast value of 22-23 years is 1.75 yuan / 2.71 yuan), maintaining the “buy” rating.
Risk warning: risk of price rise of main raw materials; Lower than expected risks in downstream industries; Technical iteration risk; The risk of intensified competition in the new energy vehicle industry; The public data used in the research report may have the risk of information lag or untimely update.
