\u3000\u3 Shengda Resources Co.Ltd(000603) 985 Jiangyin Hengrun Heavy Industries Co.Ltd(603985) )
Event: on April 15, 2022, the company issued its annual report for 2021. In 2021, the company realized a main business income of 2.293 billion yuan, a year-on-year decrease of 3.82%. The net profit attributable to the shareholders of the listed company was 44200 yuan, a year-on-year decrease of 4.59%.
Comments:
In the 21st year, the demand of the main business of wind power flange was under pressure, and the intensified competition of onshore flange and waste business affected the overall interest rate of the company. In 2021, the company achieved a total revenue of 2.293 billion yuan, including 1.208 billion yuan from wind power flange business, 320 million yuan from forged flange and other free forging business, and 619 million yuan from other businesses (mainly processing waste). In 2021, the gross profit margin of the company was 24.29% and the net profit margin was 19.17%. Affected by the rush of wind power installation in 20 years, the demand for wind power installation fell in 21 years, and the bidding price competition was fierce. In particular, the gross profit margin of onshore wind power flange business fell sharply in the second half of the year. In the past 21 years, the amount of offshore wind power bidding decreased significantly, and the volume of offshore wind power flange business of the company declined. The gross profit margin of the company in the fourth quarter was 9.68%, far lower than the normal level of the company. In terms of breakdown, the gross profit margin of all business segments of the company fell in the second half of the year, of which the waste business fell the most significantly, and the annual gross profit margin fell to 6.5%, and its gross profit was only 40 million yuan in the second half of the year, significantly lower than 57 million yuan in the middle of the year. The overall decline in demand for wind power flanges and the sharp decline in gross profit of waste business have affected the overall gross profit margin of the company. In 2021, the company’s non recurring profit and loss was 166 million, mainly from the disposal of non current assets. During the reporting period, due to the non-compliance of the performance commitment of Guangke optoelectronics, the original equity transferor of Guangke optoelectronics repurchased the 31% equity of Guangke optoelectronics held by the company, and the company also sold the equity of Yinniu microelectronics.
Wind power bearing and gear business will develop a new growth curve. The company will lay out the wind power bearing business in 2020 and jointly develop and manufacture wind power bearings with downstream customers. The company’s fixed additional funds in 2021 are mainly used for the capacity expansion project of large-scale precision machined forgings for 12MW offshore wind turbine units with an annual output of 50000 tons, the production line project of 4000 sets of large-scale wind turbine bearings with an annual output of 100000 tons and the deep processing project of gears with an annual output of 100000 tons. At present, the company’s bearing products are in the late stage of verification and will be supplied in batches. The market space of wind power bearing is larger, and the domestic substitution space is also larger, which is an important driving force for the future growth of the company. In the future, the company will directly provide gears for downstream customers, save the production cost of downstream GearBox customers and shorten their production cycle, which has a good market prospect.
Offshore wind power bidding is expected to pick up, and the company’s core competitiveness is expected to highlight. In 2021, the installed capacity of China’s offshore wind was high, but the bidding volume of offshore wind was small, and the demand of the company’s wind power flange business actually declined significantly. The bidding volume of offshore wind power may increase significantly in 22 years. As a leading enterprise of China’s offshore wind flange, the company is expected to continue to expand the market in the field of offshore wind flange. The market structure of sea wind flange is better than that of land wind flange, and its price and profit level are usually higher than that of land wind power flange. It is expected that the profitability of the company will also recover.
Profit forecast and investment rating: we predict that the net profit from 2022 to 2024 will be 600 million yuan, 893 million yuan and 1.184 billion yuan respectively, and the corresponding EPS will be 1.77 yuan / share, 2.63 yuan / share and 3.49 yuan / share respectively, corresponding to 14 times, 10 times and 7 times of the current share price PE respectively. Maintain the company’s “buy” rating.
Risk factors: deterioration of macro environment; The epidemic control was not as expected; The financing situation was less than expected.
