\u3000\u3 Guocheng Mining Co.Ltd(000688) 668 Dongguan Dingtong Precision Metal Co.Ltd(688668) )
Event: the company released a performance forecast on April 11. It is expected to achieve a revenue of 176 million yuan in the first quarter of 2022, with a year-on-year increase of 70.6% and a month on month increase of 13.3%; The net profit attributable to the parent company was 32.23 million yuan, with a year-on-year increase of 46.1% and a month on month increase of 38.9%;
Under the disturbance of macro adverse factors in the first quarter, the company's performance grew faster than expected. In the first quarter of 2022, there were many adverse macro factors, including epidemic control, shortage of raw material supply, sharp fluctuations in commodity prices and so on. However, the company's revenue growth maintained a high growth rate of more than 70%; After excluding the impact of restricted stock equity incentive, the net profit attributable to the parent increased by 64.7% year-on-year, and the net profit attributable to the parent after deducting fees increased by 81.8% year-on-year. At the same time, considering that the first quarter was a relatively off-season, the company's performance still maintained high growth month on month, and the overall performance exceeded our expectations.
The communication business maintained a high growth, and the automobile customers continued to expand. According to the company's announcement, the company's performance growth is mainly due to the company's continuous expansion of product categories and series and the enrichment of product types. At the same time, it benefits from the increasing investment in the construction of data centers and servers outside China, and the market demand for the company's communication connectors and their components is growing. We believe that the growth rate of the company's performance is significantly higher than that of the industry, which reflects the full recognition of the company's product strength in the key customer supply system. At the same time, the company's automobile connector continues to deepen existing customer cooperation and product development, and the proportion of automobile connector revenue is expected to continue to increase.
Fixed increase fund-raising to expand production capacity, high-speed growth and sustainability. On April 9, the company disclosed the fixed increase plan, which is expected to raise 800million yuan, of which 388million yuan is used for the production and construction of high-speed communication connector components, 252million yuan is used for the production and construction of new energy vehicle connectors, and 160million yuan is used to supplement working capital. After the completion of the production and construction project of high-speed communication connector components, it is expected that the annual production capacity of high-speed communication connector components will be increased by 47.7 million, the average annual operating revenue will be increased by 620 million yuan, the average annual net profit will be increased by 101 million yuan, and IRR 18.0 million yuan 86%。 After the completion of the new energy vehicle connector production and construction project, it is expected that the annual production capacity of new energy vehicle connectors will be increased by 24.9 million, the average annual new operating revenue will be 366 million yuan, the average annual new net profit will be 51.48 million yuan, and irr15.5 million yuan 72%. The company's performance is growing rapidly and the downstream demand is strong. This fixed increase and expansion of production is conducive to alleviating the pressure on the company's medium and long-term production capacity and improving the sustainability of high-speed performance growth.
Investment suggestion: the company's communication connector components benefit from the growth of revenue scale and supply proportion of core key customers; The automobile connector components benefited from the increase in the penetration rate of new energy vehicles, which led to the increase in the growth rate of the automobile connector industry. The company actively expanded the customers of automobile enterprises and gradually changed its role from tier2 to Tier1; By the end of 2021, the production rate of raised investment projects has reached 49%, and it is expected to open the capacity constraints after it is fully completed, and the company's performance is expected to maintain high-speed growth. We maintain the profit forecast. It is estimated that the operating revenue of the company in 2022 / 23 / 24 will be RMB 869 / 1284 / 1867 million, and the net profit attributable to the parent company will be RMB 160 / 260 / 390 million. Considering the valuation of comparable companies and the growth rate of the company's net profit, we give the company 45 times PE in 2022, maintain the target market value of RMB 7.19 billion, maintain the target price of RMB 84.6, and maintain the "Buy-A" investment rating.
Risk warning: the production schedule of raised investment projects is less than expected, the expansion process of automobile customers is less than expected, and the order demand of key customers is less than expected
