\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 456 Baoji Titanium Industry Co.Ltd(600456) )
Event: the company released its 2021 annual report, realizing revenue (RMB 5.246 billion, + 20.94%) and net profit attributable to the parent company (RMB 560 million, + 54.49%).
Focus on ensuring the needs of core strategic customers, and the revenue target in 2022 is expected to be exceeded. With the company's continuous focus on major customers and projects, ensure the needs of core strategic customers, and continuously improve the application proportion of titanium materials in aerospace and ship weapons through product structure optimization and adjustment, the company's revenue and profit have increased steadily, and the sales volume of titanium products (26600 tons, + 41.49%), Among them, the sales volume of titanium materials (20900 tons, + 49.28%).
Quarterly, the net profit attributable to the parent company of 21q1-q4 is 96 million yuan, 182 million yuan, 193 million yuan and 89 million yuan respectively. The scale of 21q4 revenue and profit has decreased significantly. The reference 21q4 gross profit margin and net profit margin are 39.70% and 17.37% respectively, which are higher than those in previous quarters. It is expected that the delivery proportion of civil products with low gross profit will decrease significantly in the fourth quarter alone; At the same time, according to the Q1 performance forecast, the net profit attributable to the parent company in 22q1 is expected to be 180205 million yuan, with a year-on-year increase of 87% - 112.97%. We believe that considering that the company's actual titanium processing capacity will only be 30900 tons in 2021 through internal technical transformation, which is far higher than the design capacity of 20000 tons, and the current capacity under construction is still 7790 tons, it is expected that the performance of 22q2-q4 is expected to continue to improve in the process of gradual capacity climb.
The annual gross profit margin declined slightly and the net profit margin increased significantly. The gross profit margin of the company decreased by 0.99pct to 23.27%, which is expected to be mainly due to the decrease in the sales proportion of aerospace grade products in foreign trade products; On the expense side, the expense rate decreased by 3.29pct to 9.48% during 2021, resulting in a year-on-year increase in net interest rate of 2.66pct to 11.91%.
The forward-looking indicators of the balance sheet are outstanding, and the annual business objectives are expected to be exceeded. In 2021, the company's inventory increased by 34.71% compared with the beginning of the period, of which raw materials, inventory goods and issued goods increased by 59.21%, 43.78% and 122% respectively, which were higher than the growth rate of the company's revenue end in the current year. At the same time, the growth of contract liabilities driven by the growth of advance payment for goods increased by 156.35%, which may reflect that the company's downstream demand is full and is actively producing and preparing goods. In addition, the construction in progress increased by 106.49%, indicating that the company is actively promoting the construction of raised investment projects, The capacity end is expected to be continuously expanded. According to the annual report, the company plans to achieve revenue in 22 years (5.5 billion yuan, + 5%), while referring to the 2021 revenue target in the 2020 annual report (4.8 billion yuan, + 11%), but the actual completion value (5.246 billion yuan, + 20.94%), we believe that combined with the company's current strong demand side and strong expansion expectation at the capacity side, it is expected that the revenue target in 2022 is expected to be exceeded.
Investment suggestion: as a leading enterprise of Chinese military titanium alloy, the company will continue to benefit from the high demand growth brought by the two boom tracks of aerospace and aviation. With the promotion of technological transformation and the gradual production of new production capacity, it is expected to boost the company's performance. We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 860 million, RMB 1.21 billion and RMB 1.57 billion respectively, with corresponding valuations of 27, 19 and 15 times respectively, maintaining the "Buy-A" rating.
Risk tip: military orders are less than expected.
