\u3000\u3 Guocheng Mining Co.Ltd(000688) 188 Shanghai Friendess Electronic Technology Corporation Limited(688188) )
Event: the company released its 2021 annual report. In 2021, the company achieved a revenue of 913 million yuan, a year-on-year increase of 60.02%; The net profit attributable to the parent company was 550 million yuan, a year-on-year increase of 48.46%; The net profit attributable to the parent company after non deduction was 544 million yuan, a year-on-year increase of 78.77%.
Comments:
High performance growth, high R & D investment and continuous consolidation of competitiveness. On the revenue side, the company’s revenue in 2021 was 913 million yuan, an increase of 60.02% at the same time. Quarterly, the revenue growth rate of 2021q1-q4 was 147%, 92.71%, 45.59% and 11.67% respectively. Due to the downward impact of manufacturing investment, the demand growth rate of laser cutting equipment slowed down; On the profit side, the company realized a net profit attributable to the parent company of 550 million yuan in 2021, an increase of 48.46% at the same time. The growth rate of Q1-Q4 net profit attributable to the parent company was 126.39%, 104.54%, 20.05% and – 5.88% respectively. In 2021, the gross profit margin was 80.29%, which remained basically stable, with a net profit margin of 60.09% and a decrease of 4.66 PCT at the same time, which was mainly due to the reduction of investment income and the increase of R & D investment caused by the reduction of bank financial investment. In 2021, the sales expense rate was 4.63%, decreased by 0.09pct, the management expense rate was 6.62%, decreased by 0.49pct, the financial expense rate was – 3.56%, decreased by 3.18pct, the R & D expense rate was 15.12%, increased by 0.74pct, the R & D investment continued to increase, and the competitiveness of the company continued to consolidate.
The laser cutting control system maintains high growth and the high-power market continues to develop. In 2021, the revenue growth of the company’s servo system, board system and bus system was 36.13%, 37.66% and 98.78% respectively. The bus system in the high-power market further accelerated the pace of import substitution, the localization rate continued to improve, the company achieved new breakthroughs in product technical indicators and service performance, and still maintained the market position of the first manufacturer of high-power laser cutting control system in China. We believe that in the medium and long term, the penetration rate of low-power cutting control system continues to increase, the high-power market is rapid and large-scale, the import substitution is accelerated, the ultrafast laser market is gradually opened, and the company’s laser cutting control system is expected to maintain a rapid growth rate in the medium and long term. In 2021, the gross profit margins of the company’s servo system, board system and bus system were 86.11%, 79.80% and 74.77% respectively, with a year-on-year increase of 0.13/0.67/0.29pct respectively. In the case of the rise in the price of raw materials last year, the gross profit margin still increased, indicating that the industry still maintains high entry barriers.
We will continue to expand new business areas such as cutting head and intelligent welding. Based on the self-developed core technologies of computer graphics (CAD), computer aided manufacturing (CAM), digital control (NC), sensors and hardware technology, the company has carried out horizontal and vertical business expansion and expanded new fields such as layout cutting head and intelligent welding. In 2022, the company decided to increase production and raised a total of 958 million yuan for intelligent cutting head expansion project (with a total investment of 618 million), intelligent welding Siasun Robot&Automation Co.Ltd(300024) and control system industrialization project (with a total investment of 407 million), and ultra-high precision drive control integrated R & D project (with a total investment of 404 million). The cutting head business benefited from the advantages of channels and increased rapidly. The revenue of the subsidiary of bospin automation, the main business body, was 88.68109684/819041 million yuan from 2019 to 2021 respectively. It turned into profit in 2021. With the continuous production of fixed growth projects, the cutting head business has a large growth space. In addition, based on the horizontal expansion in the field of industrial automation, the company continues to promote the layout of ultra-high precision machining field; The laser intelligent welding solution has signed purchase intention agreements with Jiangsu Hongyu heavy industry, Jiangsu Bafang steel structure and China Construction steel structure. The company has gradually opened up growth space through horizontal and vertical continuous expansion.
Profit forecast and investment rating: we expect the net profit attributable to the parent company from 2022 to 2024 to be 7.36, 9.42 and 11.97 yuan respectively, corresponding to 36 / 28 / 22 times of PE respectively, maintaining the “buy” investment rating of the company.
Risk factors: the import substitution of high-power laser cutting control system is not as expected; The demand for ultrafast laser is less than expected; The expansion of laser first-class business is less than expected
