\u3000\u3 Guocheng Mining Co.Ltd(000688) 698 Suzhou Veichi Electric Co.Ltd(688698) )
Matters:
The company released its annual report for 2021. During the reporting period, it achieved an operating revenue of 819 million yuan, a year-on-year increase of 43.10%; The net profit attributable to the shareholders of the parent company was 127 million yuan, a year-on-year increase of 44.76%; The net profit attributable to the parent company after non deduction was 114 million yuan, a year-on-year increase of 37.20%. The company’s performance is in line with expectations. The company plans to pay a cash dividend of 0.176 yuan (including tax) per share and does not convert the capital reserve into share capital.
Ping An View:
The company has a good development momentum and its performance has maintained rapid growth. The company achieved an operating revenue of 819 million yuan in 21 years, with a year-on-year increase of 43.10%; The net profit attributable to the parent company was 127 million yuan, a year-on-year increase of 44.76%; The net profit attributable to the parent company after non deduction was 114 million yuan, a year-on-year increase of 37.20%. In terms of products, the company’s frequency converter business achieved a revenue of 597 million yuan, a year-on-year increase of 31.21%, of which the revenue of industry special aircraft / general frequency converter was 376 / 221 million yuan, a year-on-year increase of 36.58% / 22.95% respectively; The company’s servo system and motion controller business achieved a revenue of 187 million yuan, a year-on-year increase of 82.36%. Although the industrial control industry as a whole has been affected by negative factors such as rising commodity prices and tight supply of core parts in the past 21 years, the company’s main business has maintained a momentum of rapid development. Looking forward to the next 22 years, we expect that the company is expected to maintain a rapid growth trend with further improved product layout and deep cultivation of differentiation strategy in subdivided industries.
Product competitiveness continues to improve, Around “double carbon” “Layout multiple sub areas. The company continues to increase the R & D of key technologies and product iteration, and continuously improve the ability of independent innovation and product performance. In the past 21 years, the company’s servo system product line launched heavy new products such as v7e series servo motor, sd710 and sd700-na servo driver, sd500m3 bus main shaft servo and encoder, which helped the rapid growth of servo business. In addition, the company increased its investment in the field of control technology and established the control system At present, the company’s vc1s vc3 VC5 series general-purpose PLC has begun to be sold to the market. By making up for the shortcomings in the field of control technology, the company has improved the product line layout in the control layer, drive layer and execution layer of the automation system, and its ability to provide customers with system solutions has been significantly improved. In terms of market development, Focusing on the “double carbon” policy, the company has established an efficient and intelligent industry department to promote the application of the company’s frequency converter in the field of new energy-efficient motors such as synchronous reluctance motor, permanent magnet synchronous motor and synchronous direct drive motor, which is expected to benefit from the rising demand brought by the energy-saving transformation of the manufacturing industry. Driven by the enhanced competitiveness of the product line and the layout of high boom market segments, the company’s business is expected to maintain a good development momentum.
The draft equity incentive plan has been released, and the development of the company is full of momentum. The company issued the 2022 restricted stock incentive plan (Draft) on April 8. The number of shares to be granted in this stock incentive plan is 3.6 million, accounting for 2% of the total share capital of the company on the announcement date; The total number of incentive objects to be awarded is 180, including the company’s technical backbone, business backbone and other core personnel. From the perspective of performance assessment objectives, the target of Grade A is based on the revenue of 21 years, and the year-on-year growth of revenue in 22 / 23 / 24 years is no less than 30% / 60% / 100%; Or based on the net profit of 21 years, the net profit of 22 / 23 / 24 years will increase by no less than 25% / 55% / 95% year-on-year. The company’s performance assessment target is much higher than the average growth rate of the industrial control industry, which shows the company’s confidence in future development. We believe that the smooth implementation of the company’s equity plan will contribute to the stability of the core team and mobilize the enthusiasm of employees, and further enhance the development momentum of the company.
Investment suggestion: the company takes the low-voltage frequency converter business as the core and focuses on the electrical transmission and motion control market. Through the strategy of product technology upgrading, focusing on industrial applications and providing customized solutions for head customers, the company has shown a trend of accelerated development in recent years. Looking forward to the future, with the improvement of the layout of the company’s product line and the continuous implementation of the results of focusing on the industry segmentation strategy, we are optimistic about the potential of the company to gradually grow into an industry-leading supplier of comprehensive industrial automation solutions. Considering the pressure of the current macroeconomic environment and the fluctuation of the supply chain, we lowered the net profit attributable to the parent company for 22 / 23 years to 164 / 221 million yuan respectively (the previous value was 181 / 280 million yuan respectively), and increased the forecast of the net profit attributable to the parent company for 24 years to 318 million yuan, corresponding to the closing price of PE on April 18, which was 18.1/13.4/9.3 times respectively. Maintain the “recommended” rating.
Risk tips: 1) if the company’s progress in product technology and market promotion does not meet expectations, it will affect the performance growth; 2) If China’s macro-economy drops sharply, it will affect the overall demand of the industrial control industry; 3) If the supply of raw materials is in short supply or the price rises sharply, the business performance of the company will be affected.
