\u3000\u3 Guocheng Mining Co.Ltd(000688) 777 Zhejiang Supcon Technology Co.Ltd(688777) )
Event: Zhejiang Supcon Technology Co.Ltd(688777) released the annual report of 2021 on the evening of April 11, realizing an annual operating revenue of 4.519 billion yuan, a year-on-year increase of 43.08%; The net profit attributable to the parent company was 582 million yuan, a year-on-year increase of 37.42%; Deduct non net profit of 449 million yuan, with a year-on-year increase of 38.36%; The basic earnings per share is 1.18 yuan and the proposed cash dividend is 0.36 yuan (including tax). Among them, 2021q4 achieved an operating revenue of 1.597 billion yuan, a year-on-year increase of 46.54%; The net profit attributable to the parent company was 249 million yuan, a year-on-year increase of 36.95%. In the early stage, we predicted that the net profit attributable to the parent company was 555 million yuan, slightly higher than expected.
Comments:
The market share of core products increased steadily, and the revenue in the petrochemical field increased significantly
In 2021, the market share of the company's core products in China increased steadily: the market share of DCS reached 33.8%, with a year-on-year increase of 5.3pct, ranking first for 11 consecutive years; The market share of safety instrument system is 25.7%, with a year-on-year increase of 3.3pct, ranking the second; The market share of advanced process control software of industrial software products was 28.6%, with a year-on-year increase of 1.6pct, ranking first. By industry, the petrochemical industry achieved an operating revenue of 954 million yuan, a year-on-year increase of 73.9%, ranking the top among the subdivided industries with a revenue of more than 100 million yuan.
The growth of large projects in the Chinese market is obvious, and the international market is worth looking forward to
Through 5s stores in six regions in China, the company strengthened sales management and realized precision marketing. The contract amount of more than 10 million large projects in the whole year increased by 95% year-on-year. In terms of overseas business, the company built localized operation capacity, with a revenue of 184 million yuan in 2021, a year-on-year increase of 53.8%; Successfully entered the list of qualified suppliers of BASF. On March 16, 2022, the holding subsidiary obtained the qualification of Saudi Aramco supplier. This indicates that the central control products have been recognized by world-class major customers, and the international market will further open the company's long-term growth space.
It is proposed to acquire part of the equity of PCCW to help form an overall solution
On February 24, 2022, the company announced that it planned to acquire 22% equity of PCCW with cash of 561 million yuan. The equity participation is expected to strengthen the cooperation with PCCW, strengthen the strategic layout of the company's "industry 3.0 + industry 4.0" and 5T business, and enhance the company's comprehensive competitiveness in the field of digitization and intelligence.
Profit forecast and valuation
Considering the stability of the company's Chinese market and the great breakthrough made in the international market, we expect that the revenue in 202223 will be 5.9667636 billion yuan (original value: 4.955 billion yuan and 6.010 billion yuan), and the net profit attributable to the parent company will be 761949 million yuan (original value: 710 million yuan and 851 million yuan) respectively. At the same time, the 24-year profit forecast revenue will be 9.621 billion yuan, the net profit will be 1.235 billion yuan, EPS will be 1.53/1.91/2.49 yuan / share, and the corresponding PE will be 41x / 33x / 25X respectively. Maintain the "overweight" rating.
Risk tips
\u3000\u30001. Systemic risk, 2 Downstream capex volatility risk, 3 Product expansion was less than expected.
