\u3000\u3 Shengda Resources Co.Ltd(000603) 195 Gongniu Group Co.Ltd(603195) )
Event: the company achieved an operating revenue of 12.38 billion yuan in 2021, a year-on-year increase of + 23.2%; The net profit attributable to the parent company was 2.78 billion yuan, a year-on-year increase of + 20.2%; Deduct the net profit not attributable to the parent company of RMB 2.63 billion, a year-on-year increase of + 18.5%. The company achieved an operating revenue of 3.37 billion yuan in 2021q4, a year-on-year increase of + 16.1%; The net profit attributable to the parent company was 570 million yuan, a year-on-year increase of – 19.7%; Deduction of net profit not attributable to the parent company was 540 million yuan, a year-on-year increase of – 20.1%. The company’s annual revenue and performance meet expectations.
The company operated steadily throughout the year, with revenue & performance in line with expectations, high raw material prices and pressure on Q4 profitability. Based on the relatively low base in 2020, the company achieved a 23% restorative growth in revenue. In terms of business, the growth rates from high to low are: LED lighting (+ 38.53%) wall socket (+ 29.55%) electrical connection business (+ 15.58%, mainly converters) digital accessories business (- 10.79%). Among the main businesses, LED lighting led the fastest growth rate. On the profit side, the overall profitability of the company basically remained high, with the annual gross profit margin of 37.0%, year-on-year -3.2pct, and the net profit margin attributable to the parent company of 22.4%, year-on-year -0.6pct; In the fourth quarter alone, the gross profit margin was 32.3%, year-on-year -9.3pct, and the net profit attributable to the parent company was 17.0%, year-on-year -7.6pct. 21q4’s profitability declined significantly, mainly due to: 1) the main raw materials of the company’s products are plastic and copper (accounting for about 23% and 12% of the total procurement respectively), which fluctuated upward in the second half of the year. The rolling hedging lock in the first half of the year or the lower price at the beginning of the year. With the expiration of the lock-in price in the early stage, the pressure of raw material price rise continues to appear; 2) In the early stage of new business development, the profitability is lower than that of advantageous categories, and the increase of proportion has dragged down the overall gross profit margin; 3) Fluctuations in government subsidies. In addition, we have observed that the price fluctuation range of plastics, which accounts for a high proportion of the company’s cost, has been reduced compared with the end of last year, and the pressure on the company’s cost side may be more difficult than in the past. Superimposed on the optimization of the company’s product structure, the comprehensive and monopoly of channels, the release of network benefits and the inward tapping of potential and cost reduction, these factors are expected to jointly promote the repair of 22-year profitability.
In terms of expenses, the company actively controls the investment of expenses, responds to the pressure on the cost side, focuses on R & D and consolidates the hard strength of science and technology. The company’s sales / management / R & D / financial expense ratio in 21 years was 4.5% / 3.5% / 3.8% / – 0.7%, with a year-on-year increase of -0.6 / – 0.8 / – 0.2 / – 0.4pct respectively; The ratio of sales / management / R & D / financial expenses of 21q4 company was 4.8% / 3.0% / 5.0% / – 0.5%, respectively – 0.5 / – 1.6 / + 0.5 / – 0.1pct year-on-year. On the one hand, we believe that in order to hedge the cost pressure of raw materials, the company Q4 has reduced the investment of sales & management expenses; On the other hand, Q4 has increased its R & D investment and set up R & D and operation headquarters in Shanghai and Shenzhen, which is expected to make efforts to transform R & D achievements and drive business upgrading.
The basic disk business grew steadily, and the second growth curve was excavated in the multi domain layout. 1) Electric connection business: the annual revenue of 21 years was 6.41 billion yuan, a year-on-year increase of + 15.6%. At the same time, the company complies with the upsurge of new infrastructure and new energy, develops industrial power distribution and new energy vehicle charging gun / pile, and realizes the broadening of power consumption scene. After its charging gun / pile products are listed, the sales volume has rapidly climbed to the forefront of the platform with the help of brand strength, the new energy vehicle has accelerated the penetration, and the superimposed vehicle enterprises gradually cancel the matching pile with the vehicle, which will jointly build a stable demand. 2) Intelligent electrical lighting business: the annual revenue was 5.55 billion yuan, a year-on-year increase of + 36.9%. The wall socket business continued to grow deeply and achieved 30% growth against the pressure of the real estate industry in 21 years. For the LED lighting business, the company established an intelligent commercial lighting team in 21 years. While developing the basic light source to the field of office and fire fighting, the company launched a rich product matrix of non main lamp and mobile lighting, driving the annual revenue growth of 38.5%. In terms of intelligent ecological products, in the past 21 years, the company has strengthened in-depth cooperation with the Internet of things platform and invested in Bangqi intelligence to meet the needs of b-end intelligent lighting, so as to achieve a high growth of 140%. In addition, the company’s revenue growth of LED lighting and intelligent ecological products in the second half of the year was higher than that in the first half of the year, and the two businesses showed strong development momentum. 3) Digital accessories business: the annual revenue was 370 million yuan, with a year-on-year increase of – 10.8%, which was mainly affected by the listing cycle of new products and the change of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) flow. At present, the listed e-commerce platform of the company’s outdoor mobile power products has formed a certain sales volume. Under the trend of normalization of the epidemic, the power of e-commerce channels has also formed a certain positive impact on the recovery of categories.
Investment suggestion: as an electrician leader, the company has a clear logic for long-term development – consolidate the leading position of wall socket and converter business in advantageous categories, continue to enable the growth of LED lighting and digital accessories business, incubate emerging businesses such as charging gun / pile and outdoor power supply, and open a broader power consumption scene. We are optimistic about the leading position and long-term growth of bull in the field of civil electrician. It is estimated that the company’s net profit attributable to the parent company in 22-24 years is RMB 3.149/36.85/4.235 billion (the value was RMB 3.186/3.737 billion before 22-23 years), corresponding to 24.9x/21.3x/18.5xpe in 22-24 years, maintaining the “buy” rating.
Risk warning: the risk that the development of new business does not meet expectations; The risk that the development of new channels fails to meet the expectations; Risk of rising raw material prices; The risk of fluctuations in the real estate market; The risk of intensified market competition.
