\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 80 Wuxi Longsheng Technology Co.Ltd(300680) )
Event overview
The company released the 2021 annual performance express and 2022q1 performance forecast: in 2021, the company achieved a revenue of 930 million yuan, a year-on-year increase of + 60.8%, and a net profit attributable to the parent company of 98 million yuan, a year-on-year increase of + 81.9%; Among them, 2021q4 achieved a revenue of 312 million yuan, a year-on-year increase of + 49.5%, a month on month increase of + 40.3%, and a net profit attributable to the parent company of 27 million yuan, a year-on-year increase of + 12.2% and a month on month increase of – 6.1%. In 2022q1, the net profit attributable to the parent company is expected to be 27-33 million yuan, with a year-on-year increase of 26.8% to 56.8%.
Analysis and judgment:
22q1 continued to grow year-on-year, and the new energy business accelerated its volume
In 2021, the company’s EGR and motor iron core businesses ushered in rapid growth, driving the annual revenue of 930 million yuan, a year-on-year increase of + 60.8%, of which 2021q4 achieved revenue of 312 million yuan, a year-on-year increase of + 49.5% and a month on month increase of + 40.3%, a record high in a single quarter. Driven by the growth of revenue, the net profit attributable to the parent company in 2021 was 98 million yuan, with a year-on-year increase of + 81.9%, which was in the prediction range of early performance forecast. Among them, the net profit attributable to the parent company in 2021q4 was 27 million yuan, with a year-on-year increase of + 12.2% and a month-on-month increase of – 6.1%, which was lower than the growth rate of revenue. It was mainly affected by the lack of core in the industry, the rise in the price of raw materials and the increase of bonus expenditure.
At the same time, the company disclosed the performance forecast of 2022q1, which is expected to realize the net profit attributable to the parent company of 27-33 million yuan, with a year-on-year increase of 26.8% to 56.8%, continuing the high-speed growth trend, but it is expected to be affected by the decline in sales volume of light truck industry, the lack of core and the rise in raw material prices to a certain extent. Looking forward to the whole year of 2022, the company will simultaneously usher in two aspects: 1) EGR business: the contribution of light truck EGR of more than 3.5t to the company will be extended to the whole year, and the incremental contribution brought by heavy truck and hybrid EGR will form a strong support for EGR business; 2) Motor iron core business: we expect that the monthly delivery volume has reached about 80000 sets. With the expansion of production capacity, the delivery volume is expected to rise to 1.5 million sets + in 2022, further helping the growth of the company.
Traditional main business focuses on EGR country VI upgrade bonus period
The company’s traditional main business focuses on the EGR sector, focusing on three core products: EGR valve, cooler and throttle. The market share of the company in phase IV of China was once maintained at a high level, but the EGR business in phase V of China was under short-term pressure due to the adjustment of technical route. With the comprehensive switching of national VI emission standards from 2021, the EGR sector will usher in a period of rapid growth of policy dividends: 1) light truck: the main source of increment is more than 3.5t. Based on the original customer resources and technical advantages, the market share of the company is expected to reach 60%; 2) Heavy truck: the epidemic situation and Sino US friction accelerate domestic substitution. The company is expected to seize part of the market with its deep technical accumulation, and some customers are in the performance test stage; 3) Others: the fourth phase emission standard for non road mobile vehicles will be implemented from December 1, 2022, and is expected to contribute to the increment from 2022q4; The company pursues the strategy of developing both gasoline and diesel, and deeply explores the EGR market of hybrid vehicles. It is expected to usher in a large amount in 2022 and continue to benefit from the penetration of hybrid vehicles.
Strategic layout new energy continues to benefit from the trend of vehicle electrification
The motor iron core is equipped with high-quality customers, and the acceleration of large-scale production is imminent. In 2018, the company acquired micro research precision, fully coordinated market, technology and R & D, and successfully extended its business scope to the field of new energy vehicle drive motor iron core. At present, it has officially become a first-class supplier of a foreign electric vehicle and energy company. It began mass production in May 2021, and indirectly supported several vehicle model platform projects such as Weilai, SAIC, ideal and Nissan through joint automotive electronics, At the same time, the company also participated in the research and development of the new generation motor project of China’s top new energy vehicle customers, and obtained the supplier fixed-point letter of two international platform customers, laying a solid foundation for the subsequent expansion of the iron core industry. In the medium and long term, we believe that the company will continue to benefit from the rapid growth of the industry and high-quality customer resources under the trend of automobile electrification, and there are opportunities for the company to penetrate into other high-end motor core applications in the long term.
Natural gas injection system is bound with Bosch, the third performance growth point. Since October 2017, the company has jointly developed the “natural gas injection system” project with Bosch. In October 2019, the company was appointed by Bosch supplier to undertake the manufacturing of core component “high flow natural gas nozzle” and supporting business of natural gas injection system assembly. In October 2020, the company officially entered the stage of small batch production, conforming to the general trend of natural gas as alternative fuel in the commercial field, In 2021, the natural gas injection system officially entered the stage of mass production.
Investment advice
The company has been deeply engaged in EGR business for many years, and the three core products of EGR valve, cooler and throttle are expected to increase rapidly in phase VI in China; High quality customers supporting motor iron core continue to benefit from the trend of automobile electrification; The natural gas injection system is bound to Bosch. In view of the short-term decline in the sales volume of the light truck industry and the impact of the lack of core in the industry, the profit forecast is lowered. It is estimated that the company’s revenue from 2021 to 2023 will be adjusted from RMB 959 / 20.192949 million to RMB 930 / 19.632916 million, the net profit attributable to the parent company from RMB 105 / 249 / 395 million to RMB 98 / 213 / 338 million, and EPS from RMB 0.52/1.23/1.96 to RMB 0.49/1.05/1.67, corresponding to the closing price of RMB 17.71/share on April 14, 2022, 36 / 17 / 11 times of PE respectively, Maintain the “buy” rating.
Risk tips
The market share of EGR products in phase VI in China is lower than expected; The sales volume of commercial vehicles in China is lower than expected; The penetration of Shanxi Guoxin Energy Corporation Limited(600617) vehicles in the world and China is lower than expected; Lower than expected new energy business expansion
