\u3000\u3 Jiangsu Eastern Shenghong Co.Ltd(000301) 129 Runa Smart Equipment Co.Ltd(301129) )
The core business continues to expand rapidly, and the growth of revenue performance in 2021 is in line with expectations. The company achieved a revenue of 530 million yuan in 2021, an increase of 27% at the same time; The net profit attributable to the parent company was 170 million yuan, an increase of 32% at the same time, in line with expectations; The net profit attributable to the parent company increased by 15% after deducting the non parent company, which was slower than the growth rate of the net profit attributable to the parent company, mainly due to the recognition of more government subsidies in 2021. In terms of quarters, the company’s revenue and performance have strong seasonal characteristics. Although the projects are mainly implemented from May to November, Q4 focuses on acceptance and payment collection. The revenue / performance of 2021q4 single quarter is RMB 400 / 160 million respectively (accounting for 76% / 93% of the whole year), an increase of 30% / 26% at the same time. In terms of business, the ultrasonic heat meter / intelligent modular heat exchange unit / heating energy-saving system project with high revenue accounted for 70 / 1.1 / 150 million yuan respectively, with a same increase of 12% / 54% / 47%. The rapid expansion of intelligent modular heat exchange unit and heating energy-saving system project has driven the continuous growth of the company’s revenue. From the perspective of production and sales, the ultrasonic heat meter / intelligent hydraulic balance device / intelligent modular heat exchange unit / intelligent IOT data terminal achieved a sales change of 7% / – 3% / 52% / – 12% and a production change of 34% / 22% / 80% / – 47% respectively. Among them, the intelligent modular unit is the current rapid growth point of the company’s business, and the production and sales show a rapid growth trend; The decline in the production and sales of intelligent IOT data terminals is mainly due to the significant improvement made by the company to the terminal hardware products, which reduces the use of intelligent IOT data terminals. In terms of unit price, the sales unit price of ultrasonic heat meter / intelligent hydraulic balance device / intelligent modular heat exchange unit / intelligent IOT data terminal changes by + 5% / – 16% / + 1% / + 18% respectively, and the weighted average unit price increases by 16%. Under the background of rising raw material prices, the overall unit price has increased, showing a certain bargaining power.
The profitability continued to be strong, the per capita output value increased significantly, and the net inflow of cash flow narrowed due to the increase of goods preparation. In 2021, the company’s gross profit margin was 55%, yoy-1 PCT. The gross profit margin declined slightly due to the rise of raw material prices, but remained at a high level as a whole. During the period, the expense rate was 21.0%, a decrease of 1.8 PCT compared with the previous year, of which the sales / management / R & D / financial expense rate changed by – 0.6 / – 0.5 / – 0.2 / – 0.5 PCT respectively, showing economies of scale, and the per capita output value increased significantly (in 2021, the per capita output value was 850000 yuan, an increase of 27%), driving the company’s sales, management, R & D and other expense rates to decline; The decrease of financial expense rate is mainly due to the obvious increase of deposit interest of the company. The impairment loss of assets (including credit) is about 15 million yuan. The income tax rate is 14.2%, yoy + 1.1 PCT. The net interest rate attributable to the parent company is 32.3%, yoy + 1.0 PCT. In 2021, the company’s operating cash flow was RMB 80 million, a decrease of RMB 30 million over the previous year, mainly due to the increase in procurement caused by the company’s preparation in advance according to orders under the condition of rising raw material prices. The cash to cash ratio / cash to pay ratio is 86% / 93% respectively, and yoy-1 / + 17 PCTs.
Winning large intelligent heating orders to strengthen the driving force of annual profit growth. Recently, the company announced that it won the bid for “Ai intelligent heating project in Shizhong District of Zaozhuang Thermal Power Corporation”. The project has a large scale, reaching 250 million yuan, which is 47% of the revenue in 2021. It mainly provides AI and intelligent heating management platform, intelligent hydraulic balance device, AI controller at heat exchange station level, AI intelligent heat exchange equipment and other equipment, and carries out operation adjustment and service in two heating seasons. At present, the company’s annual centralized bidding period has not yet arrived. The winning of large orders not only shows the recognition of old customers to the company, but also because the supply period of the project is only 45 days, there is still plenty of time to undertake and implement more orders during the year, and the annual profit can grow rapidly.
Release the equity incentive plan to mobilize the enthusiasm of the core backbone. Recently, the company issued an equity incentive plan to grant 900000 shares (accounting for 1.22% of the company’s total share capital) to 24 core backbones (19 R & D technicians, 4 middle managers and 1 senior manager), with a grant price of 20 yuan / share. The unlocking condition is that the compound growth rate of revenue from 2022 to 2024 will not be less than 20%. This equity incentive defines the bottom line of growth in the next three years, and is expected to mobilize the enthusiasm of the core backbone and promote the stability and long-term development of the company.
Investment suggestion: we predict that the company’s net profit attributable to the parent company from 2022 to 2024 will be RMB 230 / 32 / 430 million respectively, with an increase of 36% / 36% / 35% (CAGR from 2021 to 2024 is 36%), EPS will be RMB 3.17/4.32/5.83 respectively, and the current share price corresponds to 17 / 13 / 9 times of PE, maintaining the “buy” rating.
Risk warning: product promotion is less than expected risk, technology development risk, new business and new market development are less than expected risk, etc.
