\u3000\u3 Bohai Water Industry Co.Ltd(000605) 305 Ficont Industry (Beijing) Co.Ltd(605305) )
Event: on April 14, the company released its 2021 annual report, with annual revenue of 883 million, yoy + 29.64%; The net profit attributable to the parent company was 232 million, yoy + 25.17%. In Q4 alone, the company realized a revenue of 259 million, yoy + 30.73%; The net profit attributable to the parent company was 51 million, yoy + 25.47%.
Core view: performance meets expectations. Both revenue side and profit side have achieved rapid growth, mainly due to: ① the new hoisting scale of wind power has reached a record high, and the market continues to expand; ② The penetration rate of safety lifting equipment was further improved; ③ The market share of core products continued to increase. The short-term pressure on the company’s profitability is mainly due to the rise in the price of raw materials at the cost side and the slight decline in the price of products. In the future, the company will actively maintain a stable profitability through cost control and refined management. Looking forward to 2022, in the era of parity, China’s wind power industry is expected to enter a stage of steady growth, the company’s demand for wind power industry continues, and overseas markets and other industries are expected to bring new increments to the company’s performance.
The performance is in line with expectations, and the expansion of overseas markets and other application fields is smooth: in 2021, the revenue of the company’s core business safety lifting equipment was 639 million yuan, yoy + 40.7%, accounting for 72.4% of the total revenue, mainly due to: ① the market continued to expand, and the scale of new hoisting of wind power reached a record high. According to Xinjiang Goldwind Science And Technology Co.Ltd(002202) data, 55.8gw of new hoisting of wind power in China in 2021, a year-on-year increase of 2.6%, still achieving high-quality development one year after the rush for loading; ② The large-scale wind turbine and offshore wind power are rapidly promoted, and the penetration rate of safety lifting equipment in the new installation is increased; ③ With excellent product quality and the improvement of sales and after-sales network, the market share of the company has been further improved and its market leading position has been further consolidated. Overseas markets and other industries other than wind power have been developed smoothly and achieved initial results: ① overseas markets: the company has increased investment in overseas markets. With the smooth implementation of the marketing and after-sales service network construction project in the Americas, the company achieved overseas revenue of 149 million in 2021, yoy + 89.85%, accounting for 17.01% (a year-on-year increase of 5.42pct). ② Other industries: the revenue was 1.6863 million, yoy + 353.94%, with a bright growth rate.
In the short-term pressure on profitability, the company strengthened internal control, improved the level of refined management and responded positively: in 2021, the company’s sales gross profit margin was 47.67%, a year-on-year decrease of 2.71 PCT (due to the adjustment of accounting policies, the freight was calculated from the expense side to the cost side, and the cost side was increased by about 55 million due to the change of caliber in the comparable period in 2020), which was mainly due to the pressure on the cost side caused by the rise of raw material prices quarter by quarter. By product, lifting equipment The gross profit margin of protective equipment was 52.18% and 36.01% respectively, with a year-on-year decrease of 0.18 and 10.53 PCT respectively. The gross profit margin of protective equipment fluctuated greatly, mainly due to the high cost of raw materials and small space for technology cost reduction. In the future, the company will actively explore cost control methods such as technology cost reduction and process optimization to keep the gross profit margin within a controllable range. The expense control level is good. In 2021, the expense rate of the company during the period was 21.26%, which was basically the same year-on-year after the caliber adjustment. Among them, the expense rates of sales, management, R & D and finance were + 0.36, -0.70, -1.17 and + 1.49pct year-on-year respectively. Under the pressure of gross profit margin and the growth of R & D expenses, the net profit margin of the company was 26.25%, down only 0.93pct year-on-year.
Pay attention to R & D investment, continue to develop new products and expand new fields. In 2021, the company’s R & D expenditure reached 57 million, a year-on-year increase of 68.8%, R & D expenditure accounted for 6.42%, and there were 149 R & D personnel, accounting for 22%. The company attaches importance to R & D, constantly pushes through the old and brings forth the new, continues to develop new products for wind power applications, and gradually expands to other application fields: ① deep ploughing wind power field: 1 According to the different needs of high-power units and offshore wind power, actively develop new products, such as tower lifting equipment for floating fans, large load lifting equipment, etc; 2. According to the stock market, innovate the process to meet the market demand of installing elevator, platform automatic opening and closing system and so on. ② Actively expand other fields: such as lifting equipment for hydropower, special lifting equipment for environmental protection detection, special lifting equipment for power inspection, special lifting equipment for three-dimensional breeding, etc.
Looking forward to 2022, the company will continue to improve its market share and penetration in line with the development of the wind power industry, and diversified development is expected to bring new incremental performance.
Industry level: under the guidance of the “double carbon” goal, the growth of the wind power industry is highly deterministic, and the virtuous cost reduction cycle brought by the large-scale wind turbine is expected to accelerate the pace of industrial development. We believe that under the guidance of market-oriented competition in the era of parity, the new installed capacity is expected to achieve steady growth, which is mainly catalyzed by the following: ① local subsidies relay national subsidies, offshore wind power is still expected to achieve rapid development and enhance the overall installed flexibility; ② Under the background of gradually improving the consumption system, the orderly promotion of the large scenic base and the unplanned increment brought by the action of wind power to the countryside; ③ The old wind farm has entered the renewal and replacement period. According to the statistics of the energy research center of the national development and Reform Commission, the renewal demand during the 14th Five Year Plan period exceeds 20GW. Based on the above considerations, we estimate that the average annual newly installed capacity during the 14th Five Year Plan period is expected to reach 65gw (grid connection caliber).
Company level: ① market diversification: the company’s products have been exported to 55 countries, the international market stock is large, and the corresponding market space is broad; ② Diversified application fields: with the portability of underlying technology, the company’s safety lifting equipment is applied to 15 industries, especially in power grid, communication, thermal power generation, construction, bridges and other fields. The company has obvious advantages of customized know-how; ③ Product diversification: for the wind power field, in addition to continuous product iteration, the company also attaches importance to enhancing the overall supporting capacity, such as offshore crane, differential, safety cover sector, etc., and the supporting value continues to increase.
Investment suggestion: we expect the company to achieve revenue of 1.135 billion yuan, 1.445 billion yuan and 1.802 billion yuan from 2022 to 2024, yoy + 28.58%, 27.25% and 24.78% respectively; Net profit of RMB 300, 385 and 484 million, yoy + 29.35%, 28.28% and 25.99%; Corresponding PE is 19.2, 15.0 and 11.9; The six-month target price is 68 yuan, which is equivalent to the valuation of 25X in 2022.
Risk tip: the prosperity of downstream wind power industry is declining; Overseas market development is blocked; The intensification of market competition and the fluctuation of stock price caused by the lifting of the ban.
