\u3000\u3 Guocheng Mining Co.Ltd(000688) 777 Zhejiang Supcon Technology Co.Ltd(688777) )
Event:
The company issued the 2021 annual report after the closing on April 11, 2022. comment:
All businesses have achieved rapid development and further enhanced the competitiveness of advantageous industries
In 021, various businesses of the company achieved rapid growth, and the market share of distributed control system (DCS) in China reached 33.8%. The company achieved an annual operating revenue of 4.519 billion yuan, a year-on-year increase of 43.08%. By product: industrial automation and intelligent manufacturing solutions achieved revenue of 3.258 billion yuan, a year-on-year increase of 39.83%; The revenue of instruments and meters was 516 million yuan, a year-on-year increase of 44.16%; Industrial software realized a revenue of 356 million yuan, a year-on-year increase of 35.86%; The revenue from operation and maintenance services was 204 million yuan, a year-on-year increase of 87.67%; The revenue of S2B platform business was 129 million yuan, with a year-on-year increase of 206.71%. By industry: the revenue of chemical, petrochemical and electric power industries was 2.566 billion yuan, accounting for 57.11%, with a year-on-year increase of 42.32%; The income of pharmaceutical and food industry increased rapidly, with an income of 306 million yuan, a year-on-year increase of 67.30%. Overseas, the company deeply built its overseas localization operation capacity and was listed as a key partner by Saudi Aramco. Its overseas business realized an income of 184 million yuan, a year-on-year increase of 53.8%.
The net profit attributable to the parent company increased by 37.42% year-on-year, and continued to be invested in R & D and marketing
The net profit attributable to the parent company was 582 million yuan, a year-on-year increase of 37.42%; The net profit deducted from non parent company was 449 million yuan, with a year-on-year increase of 38.36%. The R & D and management expenses of the company were 9.7 billion yuan and 6.4 billion yuan, respectively, and the investment rates of R & D and management were 9.4 billion yuan and 6.4 billion yuan, respectively. In terms of marketing, the company gradually deepened and optimized the operation of 5S stores, achieved a year-on-year increase of 95% in the contract amount of large projects of more than 10 million, and added 1724 customers.
The performance of 22q1 exceeded expectations, and the net profit attributable to the parent company is expected to increase by 31.30% – 56.99% year-on-year
On March 29, 2022, the company issued the voluntary disclosure announcement of performance forecast for the first quarter of 2022. Petrochemical, chemical, electric power, metallurgy and other process industries are upgrading towards informatization, intelligence, greening and service. The digital needs of process industry enterprises begin to transform to full life cycle digitization. In the first quarter, the company overcame the impact of covid-19 epidemic and strengthened its service ability to customers. Its performance still maintained rapid growth. It is expected that the net profit attributable to the parent company will reach 46 million yuan to 55 million yuan in the first quarter of 2022, with a year-on-year increase of 31.30% – 56.99%; It is estimated that the net profit deducted from non parent company is 27.5 million yuan to 33 million yuan, with a year-on-year increase of 70.07% – 104.08%.
Profit forecast and investment suggestions
The company is committed to meeting the needs of “industry 3.0 + industry 4.0” of process industry enterprises. Through years of development, the company has grown into an overall solution provider of intelligent manufacturing, and there is a broad growth space in the future. It is predicted that the operating revenue of the company from 2022 to 2024 will be RMB 6.020, 7.730 and 9.639 billion, the net profit attributable to the parent company will be RMB 750, 967 and 1.225 billion, the EPS will be RMB 1.50, 1.94 and 2.45/share, and the corresponding PE will be 42.21, 32.75 and 25.85 times. At present, the company is in the stage of rapid development, with more market opportunities and more investment in R & D and market. Recently, due to the overall market adjustment and other factors, the company’s share price has been adjusted a lot. We adjusted the company’s valuation method to PE method. Since listing, the company’s PE has mainly operated between 55-135 times. At present, the PE TTM of the computer (Shenwan) index is 41.1 times, giving the company 60 times the target PE in 2022, and the target price is 90.00 yuan. Maintain the “buy” rating.
Risk tips
Covid-19 recurrent pneumonia; 4.0 less than the industrial business expectation; Risk of core parts supply; Demand fluctuations in downstream industries such as chemical, petrochemical and pharmaceutical industries; DCS R & D and promotion were not as expected.
