\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 606 Anhui Greatwall Military Industry Co.Ltd(601606) )
Event: Anhui Greatwall Military Industry Co.Ltd(601606) released the annual report of 2021, and achieved an operating revenue of 1.696 billion yuan in 2021, a year-on-year increase of + 6.96%; The net profit attributable to the parent company was 136 million yuan, a year-on-year increase of + 16.32%; Deduct the net profit not attributable to the parent company of 52.43 million yuan, a year-on-year increase of - 46.05%; It is mainly due to the disposal income of Hongxing electromechanical assets of 67.19 million yuan. The net cash flow from the company's operating activities was 63.75 million yuan, a year-on-year increase of + 162.86%.
The proportion of military products revenue continued to increase, and the gross profit margin decreased: the company achieved military products revenue of 1.162 billion yuan in 2021, a year-on-year increase of + 8.83%; The revenue of civil products was 437 million yuan, a year-on-year increase of - 2.47%. The proportion of military products revenue in the main business revenue was 72.69%, an increase of 2.23 percentage points over 2020; Affected by the adjustment of product structure and the rise of raw material prices, the gross profit margin of military products business decreased by 2.64 percentage points to 27.08% compared with 2020. The proportion of civil products income in the main business income is 27.31%, of which 73.13% is the income of prestressed anchorage products; Affected by the rise in steel prices and raw material costs, the gross profit margin of civil products business decreased by 10.50 percentage points to 5.63% compared with 2020.
During this period, the expense rate increased slightly and continued to increase R & D Investment: the sales expense rate of the company in 2021 was 1.44%, basically the same as that in the same period last year; The management expense rate was 10.88%, an increase of 0.60 percentage points compared with 2020, which was mainly due to the cancellation of the social security allowance reduction policy of the company's employees, the increase of labor costs and the increase of depreciation of fixed assets. The company continued to increase investment in research and development of new products. In 2021, the R & D investment was 112 million yuan, a year-on-year increase of + 14.35%, accounting for 6.61% of the total revenue.
The demand for ammunition and equipment is growing rapidly, and the space for information ammunition is broad: as a consumable, the ammunition of weapons and equipment is increasing with the improvement of the intensity and frequency of training and exercises and the normalization of confrontation training and practical training. On the other hand, ammunition informatization is an important part of weapon equipment informatization. Information ammunition has a high single shot value, reduced storage life, a high proportion of renewal and procurement, and a broad market space.
The old ammunition suppliers have significant advantages and comprehensively improve the strength of scientific and technological innovation: Shenjian technology, Fangyuan Electromechanical, Dongfeng electromechanical and Hongxing Electromechanical, the four military products subsidiaries of the company, occupy an important position in the corresponding fields. The existing or developing products fully cover all services and arms of the sea, land, air and rocket forces, and have gradually realized the leap from traditional ammunition to ammunition for efficient damage, long-range suppression and precision strike, from single ammunition system to weapon system, and from Army Ammunition Equipment to Ammunition Equipment of all services and arms of the sea, air and rocket forces. In 2021, the company's first informatization ammunition d064 product obtained batch order, and d109b product completed design finalization and obtained batch order; An anti tank missile was finalized in the same year, batch orders were obtained in the same year, and product delivery was completed in the same year.
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 155 / 196 / 260 million yuan respectively, and the current share price corresponds to 51 / 40 / 31 times of PE. For the first time, give a "overweight" rating.
Risk warning: the risk of military procurement fluctuation; The risk that the development progress of new products is less than expected; Risk of untimely supply of parts or raw materials.
