\u3000\u3 Shengda Resources Co.Ltd(000603) 596 Bethel Automotive Safety Systems Co.Ltd(603596) )
Core view
Revenue continued to grow in the fourth quarter, with profits under slight pressure. In 2021, the company achieved a revenue of 3.5 billion yuan (+ 15%) and a net profit of 505 million yuan (+ 9%); Q4 has a revenue of 1.2 billion yuan (+ 14%) and a net profit of 136 million yuan (- 16%). In the context of rising raw material prices and lack of core, the profit in the fourth quarter was slightly under pressure.
Affected by the rise in the price of raw materials, the profit margin decreased slightly. In 2021, the gross profit margin of the company was 24.2%, a year-on-year decrease of 2.2pct, and the net profit margin was 15.1%, a year-on-year decrease of 1.1pct. Q4 gross profit margin was 22.1%, down 2.8pct year-on-year and 2.4pct month on month; The net interest rate was 11.7%, a year-on-year decrease of 3.4pct, a month on month decrease of 4.5pct, and the decline of Q4 profitability. We believe that it is mainly affected by the rise in the price of raw materials.
Increased investment in new product R & D, and the R & D expense rate increased significantly. In 2021, the company’s four rate was 9.7%, with a year-on-year increase of 0.8pct, of which the rates of management / R & D / sales / finance expenses were 2.36/6.85/0.81/ -0.35pct respectively, with a year-on-year change of -0.26 / + 1.11 / – 0.07 / + 0.05pct. The change of R & D expenses was large, mainly due to the promotion of new product R & D and mass production delivery and the increase of R & D expenses.
New businesses have developed rapidly, and the sales of intelligent electronic control products have increased significantly. The company’s products are mainly divided into two categories: mechanical braking products (the revenue in 2021 accounted for 60%, year-on-year – 8%) and electric braking products (the revenue in 2021 accounted for 37%, year-on-year + 12%). Benefiting from the localization substitution of EPB and the gradual mass production of wcbs, the company sold 1.32 million sets of intelligent electric control products in 2021, a year-on-year increase of 57%, bringing a revenue of 1.275 billion yuan, a year-on-year increase of 65%.
Acquire Wanda steering gear and layout the steering system. The company and its related party Ruizhi Lianneng acquired the equity of Wanda Xiangji company (the company invested 200 million, 45% equity; Ruizhi Lianneng invested 90 million, 20% equity). Wanda steering gear is mainly engaged in automobile steering system, and its main products are steering gear and steering column. We believe that the company’s layout of the steering system business is conducive to the expansion of the company’s category and benefits from the general trend of chassis intelligence.
Risk warning: covid-19 epidemic continues to affect and the price of raw materials fluctuates.
Investment suggestion: considering the rising price of raw materials and the continuous lack of core in 2022, we lowered the profit forecast and expected the company to realize the net profit attributable to the parent company of RMB 690 / 9.5 / 1.26 billion in 22-24 years (the previous profit forecast was that the net profit attributable to the parent company of RMB 736 / 977 million in 20222023). The company’s line control products have made domestic breakthroughs. They are the core products of the executive layer of intelligent driving. With strong product competitiveness and smooth customer expansion, they are expected to fully benefit from the general trend of intelligent electric in the automotive industry. Referring to the valuation of comparable companies, we updated the one-year target valuation range of 67-72 yuan (79-84 yuan in the previous time), maintaining the “overweight” rating.
