\u3000\u3 Guocheng Mining Co.Ltd(000688) 676 Hainan Jinpan Smart Technology Co.Ltd(688676) )
Key investment points
Revenue + 36%, net profit + 1%, performance in line with market expectations. In 2021, the company achieved a revenue of 3.303 billion yuan, a year-on-year increase of + 36.3%; The net profit attributable to the parent company was 235 million yuan, with a year-on-year increase of + 1.3%. The net profit attributable to the parent company excluding equity incentive expenses was 240 million yuan, with a year-on-year increase of + 3.5%. The performance was basically in line with the performance express. The company has abundant orders on hand. From January to February 2022, the newly signed orders were 851 million yuan, and the accumulated orders on hand were 2.147 billion yuan (the order amount in 2021 was 4.436 billion yuan, including tax), a year-on-year increase of + 58%. With the release of raised funds and production in the early stage, the amount of orders on hand is locked in the high growth of revenue in 2022.
Affected by the bulk price rise, the gross profit margin is under pressure and hedged through price negotiation, hedging and other measures. The sharp rise in the price of raw materials & export shipping freight squeezed profits, and the gross profit margin in 2021 was 23.51%, with a year-on-year increase of -3.27pct; At present, emerging businesses are in the period of strategic investment (energy storage, digitization, etc.) plus equity incentive and other expenses, and the expense rate is basically the same year-on-year. Therefore, the net profit margin is affected by the gross profit margin, and the net profit margin attributable to the parent company in 2021 is 7.10%, with a year-on-year rate of -2.46pct. Looking forward to 2022, under the cost plus mode, the price of early orders will be renegotiated, and the profit margin is expected to be repaired.
Accelerated penetration of wind power dry transformation + high increase of optical storage connecting rod, and multi-point flowering of new and old infrastructure: 1) high benefit industries in the field of new energy β ， The revenue of the sector was + 34% year-on-year (accounting for 45% of the total revenue, which is expected to continue to improve in the future). Wind power: the revenue was 1.096 billion yuan, a year-on-year increase of + 25%, of which offshore wind power benefited from rush loading, with a year-on-year revenue of + 118% (low base). Benefiting from the development of large-scale wind turbine + sea breeze, dry transformer replaces oil transformer with the advantages of lower system comprehensive cost and maintenance free. The company is bound to mainstream manufacturers at home and abroad, and is expected to enjoy the high quality of the industry β。 We expect that the revenue CAGR of wind power field in 202224 will be about 40%.
Photovoltaic: revenue 294 million yuan, up + 60%. The company is the leader of dry transformation for photovoltaic upstream manufacturers (polysilicon to module link), and the order amount of resin pouring dry transformation will reach 460 million yuan in 2021; In addition, the company has expanded from dry transformation to photovoltaic EPC and supporting electrical equipment of booster station, enjoying the high prosperity of photovoltaic industry. We expect the revenue CAGR of 202224 to reach 40% +. Energy storage: 2022 is the first year of mass production. Guilin digital chemical plant is expected to be completed and put into operation, and its revenue is expected to exceed 100 million. 2) Infrastructure is expected to benefit from “steady growth” in 2022. In 2021, the company’s revenue in the field of infrastructure was + 79% year-on-year, of which the revenue of new infrastructure such as IDC was + 86% (low base) year-on-year, enjoying the high prosperity of the industry. In 2022, infrastructure is expected to benefit from the relevant policies of “steady growth”, and we expect the revenue growth rate to reach 20% +.
The digital chemical plant is externally enabled and has strong business continuity. RMB 171 million contract was signed with Eaglerise Electric & Electronic (China) Co.Ltd(002922) in 2021, and delivery is expected to be completed in 2022. The company has a deep understanding of process know-how, has a strong industrial software team, and has a strong sustainability of digital business.
Full orders are in hand, capacity continues to increase, delivery is guaranteed, digital quality and efficiency are improved. In 2020, the capacity utilization rate of dry-type transformer / reactor of the company was close to 100%, and the raised investment of convertible bonds continued to increase the capacity construction of Wuhan plant. We expect that by the end of 2022, the total dry transformation capacity of the four major production bases in Haikou / Guilin / Wuhan / Shanghai will nearly double compared with the same period in 2020, and is expected to reach 50 million KVA +, supporting an output value of nearly 4 billion yuan.
The company’s net investment in 2023 is 5.8-2.6 billion yuan, corresponding to the parent company’s net investment of 2023, and the current price is 5.8-2.6% / + 2.6% / 2.6 times of 2023, respectively.
Risk tip: raw material price fluctuation, wind power dry-type transformer penetration is less than expected, capacity expansion is less than expected, competition intensifies, etc.
