Jingjin equipment ( Jingjin Environmental Protection Co.Ltd(603279) )
Event: the company released its annual report for 2021. In 2021, it realized an operating revenue of 4.651 billion yuan, a year-on-year increase of + 39.7%; The net profit attributable to the parent company was 647 million yuan, a year-on-year increase of + 25.7%.
Comments:
Lithium + gravel emerging markets have been expanded effectively, and the accessories business has opened a new growth pole
The company’s annual revenue increased sharply in 2021, with an operating revenue of 4.651 billion yuan, a year-on-year increase of + 39.7%, mainly due to: ① emerging market expansion: the company actively expanded new energy and new materials and high prosperity track of sand and gravel. According to the classification of downstream application industries of filter press, the revenue in the field of new energy and new materials and sand and gravel accounted for 10.3% and 8.7% respectively in 2021, a year-on-year increase of + 2.4pct and + 1.6pct respectively. ② The revenue of accessories business increased significantly: in 2021, the company strengthened the product R & D and business expansion of supporting equipment and headed for the world’s leading manufacturer of complete filtration equipment. The accessories business opened a new growth curve of the company. From 2019 to 2021, the company’s revenue from supporting equipment and accessories business was + 7.2%, – 12.0% and + 40.1% respectively year-on-year. In terms of subdivided products, in 2021, the company’s business of filter sector, filter cloth, other accessories and supporting equipment achieved revenue of RMB 393 million, 180 million and 179 million respectively, with a year-on-year increase of + 23.8%, + 30.0% and 121.9% respectively. The company’s revenue growth momentum will not decrease in 2022. After preliminary accounting, the company realized an operating revenue of about 709 million yuan in 2022m1-2, with a year-on-year increase of about 42%.
Affected by the price rise of raw materials + amortization of equity incentive costs, the company’s profit margin declined slightly in 2021
In 2021, the net profit attributable to the parent company was 647 million yuan, a year-on-year increase of + 25.7%; The net profit margin was 13.9%, with a year-on-year increase of -1.6pct, mainly due to: ① the rise in the price of raw materials led to a year-on-year increase in the gross profit margin of -2.0pct to 30.0% in 2021. The prices of polypropylene, steel and other main raw materials increased significantly. In 2021, the company’s material cost accounted for 79.84% of the total cost, an increase of 2.7pct over the same period of last year. Although the company has made appropriate adjustments to the sales price of products, on the whole, the rise in the price of raw materials still has a negative impact on the profit margin. ② The amortization of equity incentive costs has led to higher administrative expenses and R & D expenses. In 2021, the company’s expense rate during the period was 12.01%, with a year-on-year increase of + 0.9pct, of which the expense rates of sales, management, R & D and finance were -0.39, + 0.17, + 1.19 and -0.07pct respectively year-on-year.
Then, the equity incentive is deeply bound to the core backbone employees to help the high-quality development of the company
On March 28, the company issued the draft of equity incentive in 2022, and planned to grant a total of 8.0593 million restricted shares to 294 incentive objects at a grant price of 20.24 yuan / share. The equity incentive plan effectively combines the interests of shareholders, the company and the personal interests of key employees to fully mobilize the enthusiasm of the company’s core personnel and help the company’s long-term development.
Profit forecast and investment rating
It is estimated that the net profit of the company from 2022 to 2024 will be RMB 850 million, 1.09 billion and 1.34 billion, with a year-on-year increase of + 31.6%, + 28.0% and + 22.6%, corresponding to 19.4, 15.2 and 12.4 times of PE, maintaining the “buy” rating.
Risk tips: the risk that the industry development is lower than expected, the risk that the industry competition intensifies, the risk of technology substitution, the risk that the market share decreases, and the risk that the price of raw materials increases significantly
