\u3000\u3 Guocheng Mining Co.Ltd(000688) 188 Shanghai Friendess Electronic Technology Corporation Limited(688188) )
Event: ① the company released the financial report for 2021, realizing 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 after deducting non-profit was 544 million yuan, a year-on-year increase of 78.77%.
② the company issued 3.665 million shares to specific objects, accounting for 3.65% of the total share capital. The total amount of funds raised was 977 million yuan, the issue price was 266.68 yuan / share, and the sales restriction period was 6 months. At present, the shares have not been registered.
Core view: the industry fundamentals build the bottom, and the cutting head outlines the second growth curve. The performance is similar to the previous express, which is in line with expectations. The industrial control industry has entered a downward cycle since Q3 in 2021. At the end of 2021, the central economic conference set the tone of “steady growth”. In March, the year-on-year growth rate of social finance stock rebounded to 10.6%, an increase of 0.4 PCT compared with February. Social finance is a forward-looking indicator of the industrial control industry. Based on the marginal change of the data, we judge that the industry is at the bottom stage of fundamentals, and the recovery rhythm depends on the epidemic control and policy support. The cutting head business of the company benefits from the rapid growth of high-power system, and the dual alpha with the improvement of matching rate (cutting head / high-power cutting system) will become a new performance growth point of the company in 2022.
“Dual control” affects downstream demand, and the net profit maintained rapid growth after Q4 deduction in 2021. The high growth of annual performance is due to the continuous growth of global demand for laser cutting processing, the continuous expansion of the application of the company’s products in downstream industries and the rapid growth of orders. Among them, the revenue of single Q4 was 207 million, with a year-on-year increase of 11.67%, and the growth rate decreased by 34 PCT month on month compared with Q3, which is due to the influence of dual control on downstream demand and the postponement of capital expenditure plan; The net profit attributable to the parent company was 88.57 million yuan, a year-on-year decrease of 5.88%, and the growth rate of net profit was lower than that of income, which was caused by the provision of year-end bonus in the fourth quarter and equity incentive expenses of subsidiaries (bosci); The net profit attributable to the parent company after deduction was 117 million yuan, with a year-on-year increase of 32.58%, which was higher than the income end, and the operating leverage was higher.
The business of intelligent cutting head is growing in large quantities, and the “packaging scheme” is expected to sweep the high-power laser cutting market. The company launched the product “intelligent cutting head” in 2020, which is equipped with high-power cutting system. The value of products above 6000W is 1 ~ 3 times that of high-power system. The company is one of the few enterprises that can provide an integrated solution of “cutting head + control system”, which will fully benefit from the rapid growth of high-power cutting system. In 2021, the shipment of cutting head was 81.9 million yuan, a year-on-year increase of 647%, accounting for 9% of the annual revenue. Affected by the bottleneck of production capacity and high selling price, the proportion of supporting high-power cutting system is 46%. With the increase of issuance, investment and production, and the launch of the economic packaging scheme of “cutting head + high-power laser cutting system”, the matching rate is expected to increase rapidly.
Master the underlying technology of control system and continue to break through the growth boundary. The company has mastered the underlying technology of the control system (CAD, cam, NC, sensor and hardware design). On the one hand, the company continues to improve the ecological layout in the field of laser cutting, expand from the control system to intelligent cutting head, nesting software and industrial Internet, and establish an ecological closed loop in the field of laser cutting; On the other hand, relying on the five core technologies, we continue to explore new application scenarios, extend from laser cutting control system to welding control system, ultrafast and drive control integration, and continue to break through the growth boundary.
Investment suggestion: it is estimated that the revenue growth rate of the company from 2022 to 2024 will be 30.4% / 44.9% / 52.6%, the net profit growth rate will be 31.7% / 44.7% / 49.4%, and the corresponding PE will be 37x / 25X / 17x respectively, giving an investment rating of “Buy-A”.
Risk tip: the implementation of steady growth policy is lower than expected, the epidemic situation in the Yangtze River Delta has repeatedly affected logistics, and the development of new products is lower than expected.
