\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 689 Ningbo Tuopu Group Co.Ltd(601689) )
The company released its 2021 annual report. In the whole year, it realized an operating revenue of 11.46 billion yuan (+ 76.0%), a net profit attributable to the parent company of 1.02 billion yuan (+ 61.9%), an earnings per share of 0.93 yuan, and plans to distribute a cash dividend of 2.78 yuan (including tax) for every 10 shares. Among them, Q4 achieved an operating revenue of 3.64 billion yuan (+ 66.0%) and a net profit attributable to the parent company of 260 million yuan (+ 9.6%), and the performance was in line with expectations. The company actively develops new products such as air suspension and thermal management, and the value of single vehicle is expected to exceed 30000 yuan; The customer expansion is smooth, and many customer orders such as rivian and ideal have been obtained; In addition, with the rapid expansion of global production capacity, the performance is expected to continue to grow at a high rate. We expect the company’s earnings per share from 2022 to 2024 to be 1.63 yuan, 2.15 yuan and 2.71 yuan respectively, maintaining the buy rating.
Key points supporting rating
Q4 high income growth, rising prices of raw materials, impairment and other drag on performance. Driven by the high growth of sales volume of key customers such as Tesla, the company achieved revenue of RMB 11.46 billion (+ 76.0%) in 2021, including shock absorber of RMB 3.35 billion (+ 30.7%), interior parts of RMB 3.58 billion (+ 60.9%), chassis system of RMB 2.62 billion (+ 97.2%), automotive electronics of RMB 180 million (+ 2.2%), and thermal management of RMB 1.28 billion (New). It is expected that the annual gross profit margin will decrease by 2.8pct due to the rise in the price of raw materials and the change of product structure. Sales and management expenses increased by 26.8%, mainly due to the increase of employee compensation and other expenses, which is much lower than the income, indicating that the cost control is effective; R & D expenses increased by 41.6%, mainly due to increased investment and increased costs of materials and labor; Financial expenses decreased by 19.3%, and the four expense rates decreased by 3.0pct year-on-year. High growth in revenue, decrease in gross profit margin and expense ratio, increase in asset and credit impairment by 100 million yuan year-on-year, and realize net profit attributable to parent company of 1.02 billion yuan (+ 61.9%). Among them, Q4 company’s revenue increased by 66.0%, its gross profit margin increased by 1.5pct year-on-year (with a low base in the same period), the sales and management expenses decreased, the R & D and financial expenses increased, the impairment of assets and credit increased by 51 million yuan, and the net profit attributable to the parent company was 260 million yuan (+ 9.6%), and the performance met the expectation.
The value of products continues to increase, and the platform tier0 5. The prospect of suppliers is promising. The company has implemented the platform development strategy and developed strong mechanical, electronic control, software and chassis adjustment capabilities. In addition to the original damping system and acoustic package, the company has actively expanded new products such as lightweight chassis, thermal management, intelligent driving and air suspension, which are in line with the trend of new energy and intelligent automobile industry. The value of single vehicle is up to 30000 yuan and the market space has been greatly expanded. In terms of customer development, the company promotes tier0 5 business model and achieved success. The sales volume of supporting Tesla and other products increased rapidly. Japanese customers such as Toyota and Honda made smooth progress. In addition, new customer orders such as rivian, lucid, Huawei, Xiaomi and ideal were obtained. Products and customers continue to expand, and the development prospect can be expected.
The rapid expansion of global production capacity has contributed to high performance growth. The company plans to issue convertible bonds of no more than 2.5 billion yuan to invest in the construction project of lightweight chassis system with an annual output of 1.5 million sets and the construction project of lightweight chassis system with an annual output of 3.3 million sets, which has been reviewed and approved by the CSRC. According to the feasibility report, after the project is completed, it is expected to realize revenue of 1.03 billion yuan and 2.28 billion yuan, net profit of 130 million yuan and 290 million yuan respectively. The company has completed the construction of about 1500 mu of land in Xiangtan base, Ningbo Hangzhou Bay New Area Phase II and phase III base and Ningbo Yinzhou District production base in China. Overseas Polish factories have begun mass production, and Mexican and American factories are also advancing in an orderly manner. The company’s global capacity expansion is conducive to obtaining more orders and promoting sustained and high growth of performance.
Valuation
We expect the company’s earnings per share from 2022 to 2024 to be 1.63 yuan, 2.15 yuan and 2.71 yuan respectively. The performance is expected to continue to grow high and maintain the buy rating.
Main risks of rating
1) car sales decline; 2) New business expansion is less than expected; 3) The price of raw materials has risen.
