\u3000\u3 China Vanke Co.Ltd(000002) 196 Zhejiang Founder Motor Co.Ltd(002196) )
Event: on April 14, the company released the annual report of 2021 and the first quarterly report of 2022. The operating revenue of 2021 was 1.89 billion, with a year-on-year increase of 65.5%, and the net profit attributable to the parent company was 25 million. The loss was reversed in 2021, with a gross profit margin of 8.83%; In 2022, Q1 achieved an operating revenue of 571 million, a year-on-year increase of 38%, a net profit attributable to the parent company of 06 million, a year-on-year decrease of about 12%, and a gross profit margin of 10.37%.
In the first quarter, after deducting non profits, the profit ability can be improved. In Q4 of 2021, the company realized a revenue of 589 million yuan, a year-on-year increase of 48% and a gross profit margin of 5.6%. Affected by the sharp rise in raw materials in 2021, the net profit attributable to the parent company after deducting non-profit was – 145 million yuan. The reasons for the year-on-year decline in Q1 performance in 2022 include: 1) affected by the epidemic, subsidiaries in Shenzhen, Shanghai and other places stopped production, resulting in a decline in capacity utilization and short-term pressure on performance; 2) The prices of bulk commodities such as silicon steel sheet, copper and aluminum continued to rise. At the beginning of 2022, the company has adjusted the selling price, and the price impact of some raw materials has been transmitted. However, the price rise of Q1 raw materials still affects profits, and the price transmission lags behind. In 2022, the gross profit margin of Q1 company increased by about 4.8 percentage points month on month compared with Q4 in 2021, and the net profit returned to the parent company after deducting non profit realized profit. Improvement of the company’s profitability: 1) the price of the company’s drive motor products has increased, and the rising raw material cost of the transmission part; 2) With the improvement of product structure, the company has gradually expanded from A00 model to the medium and high-end model flat wire motor products of new power car enterprises, and the value has improved significantly; 3) The scale effect is gradually reflected, and the cost is expected to be continuously optimized. On the whole, with the gradual realization of the above changes, the gross profit margin of the company is expected to be improved to the range of 15% – 20%, and the marginal improvement of profitability is expected to be gradually reflected.
The production of drive motors continued to expand, and the traditional business increased steadily. 1) Drive motor business: according to the company’s announcement, the company currently has a production capacity of about 850000 units, including about 700000 round wire motors and 150000 flat wire motors. The company plans to raise 1 billion yuan to expand the production capacity of 1.8 million new energy vehicle drive motors. The company has started the preliminary work of a new round of production expansion and is expected to accelerate the implementation in the next 2-3 years. According to the announcement, the company will actively expand other customers and gradually match new production capacity for new customers. It is expected that the annual production capacity of the company is expected to exceed 4 million units in 2025, and the revenue is expected to continue to grow at a high rate. 2) Traditional business: the company’s sewing motor customer structure is dominated by international leaders, the income and profitability are stable, the production capacity is gradually transferred to Vietnam, and the cost is further optimized; Micro and special motors such as electric tool motor and wiper motor are accelerating the expansion of new customers, and the revenue is expected to maintain stable growth; The automotive electronics business is disturbed by the epidemic in Shanghai in the short term, benefiting from the national six product orders in the medium and long term, and the revenue and profitability are expected to improve; The intelligent controller was affected by the Shenzhen epidemic in the first quarter, and its short-term profitability was under pressure. In the medium and long term, it increased steadily with the shipments of the company’s core customers Ecovacs Robotics Co.Ltd(603486) , Electrolux and other leading enterprises.
Actively expand new customers and products to the high-end market. In 2021, the company’s overall shipment volume was about 450000 units, of which nearly 80% were the drive motors of SAIC GM Wuling A00 model, contributing nearly 400million yuan to the revenue, and Xiaopeng contributed about 300million yuan to the revenue. The company’s existing core customers include Xiaopeng, Weilai, great wall, Geely and SAIC GM Wuling. The main increment from 2022 to 2023 comes from Weilai, Xiaopeng, great wall and other core customers. With the company’s stable supply to existing customers, the company will continue to expand other major new power car enterprises in China, independent brand customers and some international customers. It is expected that the company’s shipment will reach about 1 million units in 2022. We believe that the company’s traditional business is expected to grow steadily in 2022, and the driving motor business is expected to realize the state of simultaneous increase in volume and price: 1) the company further improves the pricing mechanism, and the cost of raw materials such as upstream copper and aluminum is expected to continue to be transmitted to the downstream; 2) Expand new customers and make the supporting models of products high-end; 3) The company continues to expand production, and the product volume is imminent. After turning losses into profits, the simultaneous rise of volume and price is expected to help the company’s performance maintain high growth in the future.
Investment suggestion: due to the impact of the epidemic in the first quarter, the company stopped production of some subsidiaries and downstream customers, affecting the company’s revenue and performance. Therefore, the profit forecast of the company is adjusted. It is estimated that the company’s revenue from 2022 to 2024 will be 2.798 billion yuan, 4.533 billion yuan and 7.707 billion yuan respectively, and the net profit attributable to the parent company will be 78 million yuan, 281 million yuan and 531 million yuan respectively, corresponding to the current market value of 3.9 billion yuan, and the PE will be 50, 14 and 7 times respectively, Maintain the “Buy-A” rating, and the six-month target price is 15 yuan / share.
Risk warning: raw material price fluctuation risk; Risk of new energy sales falling short of expectations; The risk that customer expansion is less than expected; Flat wire motor penetration is less than expected risk.
