\u3000\u3 Guocheng Mining Co.Ltd(000688) 698 Suzhou Veichi Electric Co.Ltd(688698) )
In the past 21 years, the company’s performance has increased rapidly. On April 17, the company released its annual report for 2021. In 2021, the company achieved an operating revenue of 819 million yuan, a year-on-year increase of 43.10%; The net profit attributable to the parent company was 125 million yuan, a year-on-year increase of 44.76%; Deduction of net profit not attributable to the parent company was 114 million yuan, with a year-on-year increase of 37.20%; The basic earnings per share was 0.70 yuan, a year-on-year increase of 7.69%.
The special plane strategy has been steadily promoted, and the special plane industry has maintained a high growth in the past 21 years. In the 21st year, the company’s inverter products achieved an operating revenue of 597 million yuan, with a year-on-year increase of 31.21%, including 376 million yuan for industry special aircraft, with a year-on-year increase of 36.58%, and the proportion of revenue in inverter products has risen to 62.98%. In terms of volume and price, the company sold 415800 frequency converters in 21 years, with an average price of 1436 yuan / set, including 195200 industrial special aircraft, with a year-on-year increase of 22.75%. The average price rose to 1928 yuan / set, with a year-on-year increase of 11.27%. The average price was significantly higher than the average price of frequency converter products. Affected by the sharp rise of bulk commodity prices, the gross profit margin of the company’s special aircraft products fell by 3.78 PCT to 34.40% in 21 years, The decline is smaller than that of the frequency converter as a whole (the gross profit margin of frequency converter products fell by 4.49pct in 21 years), and the company’s special aircraft products have higher technical premium and customer stickiness. The company has gone deep into the original advantageous industries, accelerated the layout of high-growth fields such as photovoltaic and lithium battery, and launched high-performance new products such as photovoltaic water lifting inverter and silicon carbide special driver. In the future, the company’s special aircraft products are expected to maintain a high growth rate, and the gross profit margin is expected to rise to a reasonable level, driving the accelerated development of the company’s frequency converter business.
The product line is accelerated and improved, and the speed of servo system and motion controller is bright. In the past 21 years, the company has completed the product series of control layer, drive layer and executive layer, launched v7e series servo motor, sd710 and sd700-na servo driver, sd500m3 bus spindle servo, encoder and other products, and vc1s vc3 VC5 series general-purpose PLC has also been sold. In the 21st year, the company’s servo system and control products achieved a revenue of 187 million yuan, with a year-on-year increase of 82.36%. The growth rate far exceeded the overall growth rate of the company’s revenue in the 21st year, and is accelerating the contribution of performance increment. The proportion of revenue in the 21st year has risen to 22.83%, which still has a large growth space. In terms of volume and price, the company sold 204500 servo systems and motion controllers in 21 years, with a year-on-year increase of 76.46%, and the average price was 916.54 yuan / set, with a year-on-year increase of 3.35%, realizing the double increase of volume and price; Affected by the sharp rise in commodity prices, the gross profit margin fell by 2.48pct to 21.56% year-on-year, with sufficient room for improvement. In the future, with the increase of the application proportion of the company’s self-developed encoder and the accelerated cost reduction of large-scale effect, the gross profit margin of the company’s servo system and motion controller is expected to rise, driving the company’s overall profitability to further improve.
Investment suggestion: the company achieved high growth in revenue and net profit attributable to parent company in 2021, and is expected to maintain a high growth rate from 2022 to 2024. We estimate that the company’s revenue from 2022 to 2024 will be RMB 1.088 billion, RMB 1.475 billion and RMB 1.957 billion respectively, with corresponding growth rates of 32.9%, 35.5% and 32.7% respectively; The net profit attributable to the parent company was 169 million yuan, 249 million yuan and 335 million yuan respectively, with the corresponding growth rates of 33.4%, 47.4% and 34.5% respectively. Taking the closing price on April 15 as the benchmark, the corresponding PE from 2022 to 2024 was 17x, 12x and 9x. Maintain a “recommended” rating.
Risk warning: the risk that the downstream demand is less than expected; The risk that the market development is less than expected.
