Beijing Huafeng Test & Control Technology Co.Ltd(688200)
The performance in 2021 is in line with expectations. On February 26, the company released its annual report for 2021. The company’s main revenue was 878 million yuan, a year-on-year increase of 120.96%; The net profit attributable to the parent company was 439 million yuan, a year-on-year increase of 120.28%; Deduct non net profit of 435 million yuan, with a year-on-year increase of 193.79%; The gross profit margin was 80.22%, with a year-on-year increase of 0.47%. In Q4 of 2021, the company’s main revenue in a single quarter was 241 million yuan, a year-on-year increase of 129.90%; The net profit attributable to the parent company in a single quarter was 128 million yuan, a year-on-year increase of 104.31%; The non net profit deducted in a single quarter was 115 million yuan, a year-on-year increase of 248.71%.
Comments: 1) the change of operating income is mainly due to the improvement of industry prosperity, the company’s continuous R & D investment and new product development, driving the increase of sales. 2) In 2021, the company’s main source of operating revenue was testing system products, with an operating revenue of 821 million yuan, accounting for 93.49% of the total revenue, with a year-on-year increase of 122.23%. In 2021, the company further expanded its sales team and established a wholly-owned company in Southeast Asia, increasing its product promotion ability in Southeast Asia and international markets. At the same time, we maintained close communication with customers and held large-scale customer-oriented training activities for many times, so that the sales of the test system reached a new peak. 3) The sales expense was 76 million yuan, a year-on-year increase of 54.27%; The management fee was 56 million, with a year-on-year increase of 36.12%; Financial expenses – 20 million. The change of sales expenses is mainly due to the expansion of sales scale and the increase of personnel in marketing, sales and service departments, resulting in the corresponding increase of salesperson’s salary and other sales expenses; The change of management expenses is mainly due to the increase of the company’s revenue scale, the use of the real estate in Tianjin base, the corresponding increase of various office and management personnel salaries, depreciation, water and electricity and other management expenses; Changes in financial expenses are mainly due to the company’s idle funds used to purchase time deposits and financial products. The increase in financial expenses is mainly due to the increase in the purchase of deposit products. 4) The R & D expenditure of this year was 94 million yuan, with a year-on-year increase of 59.03%, and the R & D investment accounted for 10.71%, with a year-on-year decrease of 4.17%. This year, 30 intellectual property rights were added, including 21 utility model patents. At present, the company has 133 R & D personnel, accounting for 34.28% of the total number of the company. More than 40% of the R & D personnel have graduate education, and 96.24% have bachelor’s degree or above. The company has implemented the first phase of the equity incentive plan in 2021. The incentive objects are the company’s senior managers and other core members. The grant of the equity incentive plan has established a benefit sharing mechanism between the company and employees, retained and attracted high-quality management and technical talents, fully stimulated the enthusiasm and vitality of managers, enhanced the cohesion of the company, improved the core competitiveness of the company, and promoted the sustainable and rapid development of the company. 5) The company has been deeply engaged in the field of semiconductor automatic test equipment. Over the years, it has paid attention to technology R & D and maintained a high R & D investment scale. It has a number of advanced core technologies and is China’s leading in product performance indicators. Now it has become the largest local supplier of semiconductor automatic test system in China, and has effectively realized import substitution with its own technology R & D products.
Profit forecast: considering the prosperity and cyclical impact of the semiconductor industry and the fundamentals of the company, we adjusted the profit forecast. It is estimated that the net profit attributable to the parent company will be adjusted from 596 million and 900 million to 647 million and 848 million in 20222023, 1.183 billion in 2024 and 37, 28x and 20x in 20222024. The profitability of the company’s main business is strong and stable. PE valuation is adopted. With reference to comparable companies, 50 times PE valuation is given in 2022, corresponding to the target price of 527.22 yuan.
Risk tips: cyclical fluctuations in the semiconductor industry, intensified market competition, unfavorable expansion of new markets and new fields, unstable supply of raw materials and rising prices.
