\u3000\u3 Guocheng Mining Co.Ltd(000688) 330 Shanghai Holystar Information Technology Co.Ltd(688330) )
Key investment points
Market development outside Zhejiang Province contributes to performance growth, and product competitiveness lays a high gross profit
In 2021, the company's revenue and net profit attributable to the parent company achieved rapid growth, mainly because the company accelerated the expansion of other markets while maintaining its leading position in Zhejiang Province, and made some progress. In 2021, the company's revenue share in North China, South China and southwest China increased by 9.3%, 3.0 and 0.7 percentage points year-on-year, with year-on-year growth rates of 0.85 times, 23 times and 179 times respectively, much higher than that in East China (YoY + 7.7%), and the gross profit margin was between 54% - 60%, higher than that in East China (gross profit rate 51%). It can be seen that the company expanded rapidly in markets outside the province, and its product competitiveness and profitability remained strong.
The business development of non state grid system is smooth, and the stock is increased to balance the rhythm of production and delivery
The company's sales model includes public bidding, competitive negotiation and bid winning supply. In 2021, the revenue to the State Grid system company was 759 million yuan, a year-on-year increase of 16.64%; For non state grid companies, the revenue was 370 million yuan, a year-on-year increase of 45.16%. In 2021, the production of the company's core product intelligent column switch was 28000 sets, with a year-on-year increase of 42.43%, and the inventory was 16900 sets, with a year-on-year increase of 34.46%, which is mainly due to the company's "production by sales" mode. Due to the rapid market development and order increase, the company's short-term delivery capacity can not meet the demand for centralized delivery. Therefore, the company generally balances production and delivery through an appropriate amount of safety reserve. By the end of 2021, the company's inventory was RMB 474 million, with a year-on-year increase of 55.82%, which was mainly due to the growth of business scale and the growth of goods issued in the current period, of which the book value of goods issued in the inventory reached RMB 365 million, accounting for 77.10%.
Pay equal attention to the R & D strength of software and hardware, and the core products have the advantage of intelligence
In 2021, the company's R & D cost exceeded 59 million 700 thousand yuan, and the research and development focus on intelligent monitoring equipment and platform, one or two deep fusion smart switch equipment, low-voltage distribution network of things key technologies, special communication module of Internet of things, etc. the company's research and development strength in both hardware and software is equal, maintaining the advanced characterization and advantages of core products in the integration, intelligence and integration.
Profit forecast and valuation
The company is a leading enterprise of intelligent column switch in distribution network in China, benefiting from the acceleration of intelligent construction of distribution network. We maintain the company's profit forecast. It is estimated that the net profit attributable to the parent company in 22-23 years will be 525 million yuan and 627 million yuan. The new 24-year profit forecast is estimated that the net profit attributable to the parent company in 24 years will be 754 million yuan, corresponding to EPS of 5.25, 6.27 and 7.54 yuan / share in 22-24 years, and corresponding PE of 22, 18 and 15 times. Maintain the "buy" rating.
Risk tips: (1) the risk of sales focusing on the State Grid; (2) High concentration of business areas and the risk that the expansion of new markets is less than expected; (3) Risk of single product structure
