\u3000\u3 Shengda Resources Co.Ltd(000603) 195 Gongniu Group Co.Ltd(603195) )
Core view
Event: the company announced in its annual report for 2021 that it realized an operating revenue of 12.385 billion yuan in 2021, a year-on-year increase of 23.22%; The net profit attributable to the parent company was 2.78 billion yuan, a year-on-year increase of 20.18%. Among them, the operating revenue in the fourth quarter was 3.372 billion yuan, a year-on-year increase of 16.13%; The net profit attributable to the parent company was 574 million yuan, a year-on-year decrease of 19.65%.
The revenue of intelligent electrician lighting business increased significantly, and the three businesses actively promoted the expansion of intelligent ecology and new energy track categories. In 2021, the company's electrical connection business, intelligent electrician lighting business and digital accessories business achieved an operating revenue of 6.413/55.51/373 billion yuan respectively, with a year-on-year increase of 16% / 37% / - 11%. ① Electrical connection business: expand from converters to industrial terminal power distribution and new energy electrical connection, and launch new products such as industrial connectors and new energy vehicle charging guns, with a steady overall growth; ② Intelligent electrician lighting business: in 2021, wall opening / LED lighting / other products (Yuba, circuit breaker and intelligent door lock, etc.) achieved operating revenue of RMB 3.824/10.67/797 billion respectively, with a year-on-year increase of 30% / 40% / 140%. With the release of decoration demand delayed after the epidemic, all sub categories under the low base maintained rapid growth. The company aims to meet the one-stop purchase demand in the front decoration stage of the family, enriches the product matrix day by day, and speeds up the construction of a whole house intelligent ecology with no main lamp as the core. ③ Digital accessories business: the revenue in 2021 decreased by 11% year-on-year, mainly due to the impact of new product launch cycle and Wuxi Online Offline Communication Information Technology Co.Ltd(300959) flow changes. The company is actively exploring opportunities for outdoor energy storage products and launching new products such as outdoor mobile power supply, which is expected to contribute to the increment in the future.
In the fourth quarter, the gross profit margin was under short-term pressure, and the R & D investment was overweight. In 2021, the company's gross profit margin and net profit attributable to the parent company were 36.95% and 22.45% respectively, with a year-on-year decrease of 3PCT and 1PCT, mainly due to the rise in the price of bulk raw materials and the increase in the proportion of b-end revenue. In the fourth quarter of 2021, the company achieved a gross profit margin of 32.27%, a year-on-year decrease of 9pct; In 2021q4, the rates of sales and management expenses were 4.78% and 2.98% respectively, with a year-on-year decrease of 1PCT and 2pct, and the rate of R & D expenses was 5.03%, with a year-on-year increase of 1PCT. The company continued to promote cost reduction and efficiency increase, increased R & D investment, and improved product development and technological innovation through the establishment of R & D platform and other measures; In 2021q4, the net profit margin attributable to the parent company was 17.02%, a year-on-year decrease of 8pct, and there is still room for improvement in profitability in the future.
Expand the category, grasp the opportunity of the new track, and the vision of international civil electrician leaders can be expected. The company has issued equity incentive plans for three consecutive years, binding the interests of core employees and the company in the medium and long term, and helping to radiate business vitality. In 2021, the company actively grasped the intelligent and ecological upgrading trend of consumers' demand for household products and the rapid development of new energy industry, positioned the strategic goal as "intelligent ecology + new energy strategy", and promoted the construction of systematic product system in household lighting, new energy vehicles and energy storage scenarios based on the company's accumulation in the field of electrical connection and household lighting. Relying on the vision of electrician's own new products and the sustainable development of its own channels, the company is expected to form a strong leader in the field of civil lighting products in the future.
Profit forecast and investment suggestions
Combined with the company's category expansion and cost and expense control, it is predicted that the company's net profit attributable to the parent company from 2022 to 2024 will be RMB 3.225/36.35/4.130 billion respectively (previously predicted to be RMB 3.180/3.621 billion from 2022 to 2023). The company's DCF target valuation was 163.39 yuan, maintaining the "overweight" rating.
Risk tips
Macroeconomic growth slowed down and terminal demand fell faster than expected; Industry competition intensifies; Raw material prices rose more than expected
