\u3000\u3 Shengda Resources Co.Ltd(000603) 129 Zhejiang Cfmoto Power Co.Ltd(603129) )
Events
On April 14, 2022, the company released the annual report of 2021 and the first quarter report of 2022.
Key investment points
The annual operating revenue increased by 74% year-on-year, and the net profit attributable to the parent company increased by 13% year-on-year
In 2021, the company realized a revenue of 7.86 billion yuan, an increase of 74% year-on-year; The net profit attributable to the parent company was 410 million yuan, a year-on-year increase of 13%, and the performance was in line with expectations. In Q4 of 2021, the company achieved revenue of 2.17 billion yuan, a year-on-year increase of 58%; The net profit attributable to the parent company was RMB 90 million, with a year-on-year increase of 34%. The company’s significant increase in revenue in 2021 mainly benefited from: 1) the significant increase in the sales of overseas four-wheel vehicles and two wheel vehicles; 2) The product structure of two wheeled vehicles in the Chinese market continued to be optimized. In 2022, Q1 company achieved a revenue of 2.26 billion yuan, an increase of 45% year-on-year and 5% month on month; The net profit attributable to the parent company was 110 million yuan, an increase of 10% year-on-year and 15.4% month on month.
The company’s overseas four-wheel vehicle + Chinese two wheel vehicle sales continued to grow at a high rate, and it is expected that the cost side suppression factors will gradually improve
Profitability: the company’s overall gross profit margin in 2021 was 21.5%, a year-on-year decrease of 7.8pct; The net interest rate was 5.2%, a year-on-year decrease of 2.6pct. In 2022, the gross profit margin of Q1 company was 19.6%, with a year-on-year decrease of 2.9pct and a month on month increase of 0.2pct; The net interest rate was 4.7%, a year-on-year decrease of 1.2pct and a month on month increase of 0.3pct. The profitability of Q1 in 2022 has been repaired compared with Q4 in 2021. It is expected that the cost side suppression factors will gradually improve in the second to third quarters of this year. Cost side: affected by the rising price of raw materials, the increase of sea freight and the re harsh tariff in the United States, the operating cost of the company in 2021 was 6.17 billion yuan, a year-on-year increase of 93%. Among them, the cost of raw materials was 4.5 billion yuan, a year-on-year increase of 100%, accounting for 79.7% of the total cost. The freight is 380 million yuan and the import tariff of the United States is 190 million yuan, with a total of 570 million yuan, accounting for 9% of the total cost in 2021.
Sales volume: the company sold 151000 four wheeled vehicles in 2021, with a year-on-year increase of 126%. The sales volume of two wheeled vehicles was 111000, with a year-on-year increase of 28%. Four wheeled vehicles: benefiting from China’s stable supply chain advantages and the improvement of the company’s product strength, the company’s overseas market share of four wheeled vehicles continues to increase: the market share of Europe continues to remain the first, and the market share of the United States is expected to increase from 3% in 2020 to 6% at present, and is expected to increase to 10% in the future. Two wheeled vehicle: in 2021, the company successively launched 250sr track version, 800mt, 1250tr-g and other new products, and the product structure continues to be optimized to 250ml + large displacement section. In 2021, the sales volume of 250ml + two wheeled vehicles in China was 330000, with a year-on-year increase of 66%. The sales volume of the company accounted for 12.3%, and the leading position in the industry was obvious.
The company’s export revenue of two wheeled vehicles in 2021 was + 196% year-on-year, which will become a new engine for future growth
In 2021, the company’s overseas two wheeled vehicle business realized a revenue of 350 million yuan, with a year-on-year increase of 196%. According to the latest data of China Motorcycle chamber of Commerce, from January to February 2022, the company exported more than 7000250ml + large displacement two wheeled vehicles, with a year-on-year increase of 370%. We expect that in 2022, the company’s export of large displacement two wheeled vehicles is expected to achieve a sales volume of nearly 40000 units, becoming a new growth point for the whole year.
Profit forecast and Valuation: the net profit CAGR in the next three years is 50%, maintaining the “buy” rating
It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 680 / 10.5 / 1.4 billion, with a year-on-year increase of 66% / 54% / 33% and PE of 21 / 13 / 10 times. The net profit CAGR from 2022 to 2024 is 50%. Based on the gradual increase in the market share of four-wheel vehicles and two wheel vehicles, the company has a deep understanding of consumers and is good at building popular models, and maintains the buy rating.
Risk warning: overseas development fails to meet expectations; Intensified competition in China; Raw materials, sea freight and exchange rate fluctuation risk
