\u3000\u3 China Vanke Co.Ltd(000002) 025 Guizhou Space Appliance Co.Ltd(002025) )
Event: the company released its 2021 annual report: it achieved a revenue of 5.038 billion yuan, a year-on-year increase of + 19.43%; The net profit attributable to the parent company was 487 million yuan, a year-on-year increase of + 12.37%; Deduct non net profit of 455 million yuan, a year-on-year increase of + 13.25%.
Key investment points
In 2021, the revenue increased rapidly, and the inventory and contract liabilities increased significantly, indicating that there were sufficient orders on hand: in 2021, the company’s revenue increased steadily. In terms of business, the relay realized a revenue of 323 million yuan, a year-on-year increase of 0.80%,; The connector realized a revenue of 3.325 billion yuan, a year-on-year increase of 21.88%; The revenue of motor was 1.165 billion yuan, a year-on-year increase of 15.41%; The revenue of optical communication devices reached 120 million yuan, a year-on-year increase of 4.60%; Other businesses realized a revenue of 105 million yuan, a year-on-year increase of 129.66%. The overall gross profit margin of the company was 32.62%, with a year-on-year decrease of 1.79pct, mainly due to the rise in the price of raw materials during the reporting period. In 2021, the company’s inventory was 9.944 billion yuan, an increase of 58.97% over the beginning of the year, and the contract liability was 327 million yuan, an increase of 662.83% over the beginning of the year, indicating that the downstream demand is strong, the orders are expected to continue to increase, and accelerate the release of the company’s performance.
The company is a leading enterprise in military connectors and continues to benefit from the high prosperity in the aerospace field: the company is a core backbone enterprise in China’s high-end connector, micro special motor, relay and Optoelectronic Industries. More than 70% of its products are sold to high-end customers in aerospace, aviation, electronics, ships, weapons and other fields, basically covering all military equipment fields. Civil products include communication, petroleum, rail transit, electric power, security, new energy vehicles Mainly supporting the home appliance market. In recent years, the market scale of electronic components in China has continued to grow, and there is a large space for the development of the industry. With the improvement of prosperity in the aerospace field and the high demand characteristics of expendable equipment such as missiles, the company, as the leader of military connectors, will continue to benefit from its product advantages.
The number of R & D personnel increased by 7.25 billion yuan year-on-year, accounting for 14.1% of the industry’s total, and the number of R & D personnel increased by 7.25% year-on-year. The company raised 1.431 billion yuan to carry out multi project construction: 1) for special connector and special relay industrialization construction projects; 2) An annual output of 1.53 million new infrastructure light modules; 3) An annual output of 39.762 million connectors for new infrastructure and other fields; 4) Guizhou Linquan micro special motor industrialization construction project; 5) Acquire operating assets of aerospace Linquan and supplement working capital. The new project helps to improve production capacity and solve the development bottleneck, and the company is expected to usher in greater development.
Profit forecast and investment rating: Based on the high prosperity of the military industry during the 14th Five Year Plan period and the company’s leading position in China’s aerospace connector, it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 681 million yuan, 880 million yuan and 1066 million yuan respectively, EPS will be 151 million yuan, 194 yuan and 236 yuan respectively, and the corresponding PE will be 38, 30 and 25 respectively. It will be covered for the first time and given a buy rating.
Risk tips: 1) risk of military order fluctuation; 2) New product R & D and market development are not as expected; 3) The progress of additional issuance and raised investment projects is less than expected; 4) Systemic risk.
