\u3000\u3 Guocheng Mining Co.Ltd(000688) 039 Hangzhou Arcvideo Technology Co.Ltd(688039) )
Short term performance pressure, R & D strategic investment in new business. The company achieved an operating revenue of 420 million yuan, a year-on-year increase of 14.3%, a net profit attributable to the parent company of 60 million yuan, a year-on-year decrease of 40%, and a deduction of non attributable to the parent company of 50 million yuan, a year-on-year decrease of 36.3%. In the fourth quarter, the revenue was 230 million yuan, a year-on-year increase of 7%, the net profit attributable to the parent was 50 million yuan, a year-on-year decrease of 41.6%, and the deduction of non attributable to the parent was 50 million yuan, a year-on-year decrease of 37.6%. From the revenue side, the traditional media business was RMB 295 million, down 1% year-on-year, mainly due to the reduction of revenue recognition of traditional radio and television projects, and the pan security business increased by 79% to RMB 120 million, with a good growth momentum. From the profit side, the overall gross profit margin was 48.3%, a year-on-year decline of 1.4 percentage points, mainly due to the decline of 6 percentage points in the gross profit margin of media revenue. The sales / management / R & D / financial expense ratio increased by 1.7%, decreased by 0.8%, increased by 4.8% and decreased by 0.03 percentage points respectively. The increase in expenses during the period was due to the impact of share based payment expenses (about 11 million in 21 years) on the one hand, and the increase in R & D investment on the other hand. Overall, due to the delay of income and the increase of R & D investment, the company's performance is under pressure in the short term. With the recovery of the company's media business and the gradual development of new business in the future, it is expected to return to the growth track.
Core technology leads the industry, and the UHD industry accelerates its development. The company has been leading the industry in video coding and decoding technology. It once deeply participated in the implementation of high dynamic range (HDR) video technology series standards, and took the lead in launching 8kavs3hdrvivid encoder. At the same time, 8K professional decoder led the industry. With the development of 5g technology and the development of ultra-high definition video, the company has deeply supported the construction of 8K ultra-high definition channel of China Central Television. At the same time, it recently won the contract of Yichao (Asia Pacific) with the amount of US $17.932 million. In the future, with the investment of radio and television media, operators and Internet video in UHD video and the promotion of "one hundred cities and one thousand screens", the company will fully benefit from the development of UHD industry by virtue of its leading technology.
Lay out new businesses and open up the company's growth space. In 2021, the company's R & D investment reached 90 million yuan, a year-on-year increase of 47%, accounting for 21.75% of revenue, reaching a peak in recent years. The company's R & D investment is mainly in the fields of underlying video codec technology and algorithm, pan security 5g edge intelligent terminal and vehicle intelligence. The company launched danghong eagle eye 5g intelligent terminal in the second half of 2021, which makes it possible to realize real-time return and real-time monitoring of massive video images. It is expected to become a standard product in the era of ultra-high definition video in the future; At the same time, the company actively laid out the field of intelligent vehicle and applied its own video stream processing technology to the intelligent cockpit to enhance the customer experience. Overall, the market of 5g edge intelligent terminal and vehicle field is relatively broad, and they are expected to become another growth pole of the company in the future.
Risk warning: customer demand is weakened; The promotion of intelligent terminal is less than expected; The on-board intelligent business is less than expected.
Investment suggestion: for the first time, give a "buy" rating.
It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 144 / 174 / 229 million, with a year-on-year growth rate of 134.0/21.4/31.1%; Diluted EPS = 1.79/2.17/2.85 yuan, and the current share price corresponds to PE = 26.1/21.5/16.4x. The company is a leader in ultra-high definition video and gives a "buy" rating.
