\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 99 Weihai Guangwei Composites Co.Ltd(300699) )
Event: the company released its 2021 annual report, and achieved an annual operating revenue of 2.607 billion yuan, a year-on-year increase of 23.25%; The net profit attributable to the parent company was 758 million yuan, a year-on-year increase of 18.18%; The non net profit attributable to the parent company was 713 million yuan, a year-on-year increase of 25.95%.
The comprehensive gross profit margin has decreased and the cash flow from operating activities has achieved continuous growth: the growth of the company’s return to parent profit in 2021 is lower than that of revenue, mainly due to the double impact of the decline in the price of mass production and finalized carbon fiber and the increase in the contribution proportion of civil products business, the comprehensive gross profit margin has decreased by 5.38pct year-on-year. Due to the decline of R & D expenses, the cost rate of the company decreased significantly during the period. Inventories increased by 44% year-on-year, mainly due to the increase in production materials and finished products. Cash flow from operating activities increased by 25.17% year-on-year, realizing continuous growth.
New products, new fields and new growth space: according to the company’s statistical data in the annual report, the incremental profits in the five business segments mainly come from the addition of other amorphous carbon fiber business, prepreg and composite materials. Among them, the contribution of other amorphous carbon fiber business to performance growth is 70.33%, the contribution of prepreg business to performance growth is 32.16%, and the contribution of composite material business to performance growth is obvious, reaching 17.75%. Amorphous carbon fiber products include T700, T800 and MJ series fibers with high strength and high modulus. The mass production and delivery of MJ series products marks the successful localization of key models of high-strength and high modulus carbon fiber products in China; T800h among T800 products is expected to become the main material for the next generation of aviation equipment; T700s / t800s products have been applied to gas cylinders, thermal fields and other fields in batches. The prepreg products are successfully applied to the manufacturing field of wind power blades and high-end fields such as aviation and aerospace.
The epidemic and other factors made the 22q1 profit decrease slightly year-on-year: the company released the 22q1 performance forecast, which is expected to achieve a revenue of 591 million yuan in a single quarter, a year-on-year decrease of about 5%; The net profit attributable to the parent company was 207 million yuan, a year-on-year decrease of 5.37%. The main reasons are as follows: 1) the price of finalized carbon fiber products supplied in batches decreased year-on-year, affecting the profitability of the product; 2) The covid-19 epidemic broke out in Weihai City, some business sectors were shut down, and logistics was interrupted, affecting production and product delivery. Previously, the company announced that the shutdown business had started smoothly and orderly on March 24, and gradually realized the resumption of work and production, and the production plan will be adjusted in time. It is expected that the shutdown will have a limited impact on the annual operating performance.
Profit forecast, valuation and rating: considering the price reduction of some products and the impact of 22q1 epidemic on production, the company lowered its profit forecast of 6.21% / 4.72% to 981 million yuan / 1.187 billion yuan in 202223, predicted a profit of 1.393 billion yuan in 2024, EPS of 1.89/2.29/2.69 yuan in 202224, and the corresponding PE of current stock price is 26 / 22 / 18x respectively. Driven by the needs of Chinese fighter aircraft upgrading and engine localization replacement, the company’s future development can be optimistic for a long time; Maintain the “buy” rating of the company in combination with the current valuation level.
Risk tip: the risk that the price of military products may be lowered, resulting in the decline of profitability; The risk that the rising price of raw materials will lead to the decline of profitability; The risk that the progress of new product R & D and new market development is less than expected; The risk of order reduction caused by market competition; The epidemic control situation is not as expected, resulting in the risk of reducing the company’s overseas business.
