\u3000\u3 Bohai Water Industry Co.Ltd(000605) 068 Mingxin Automotive Leather Co.Ltd(605068) )
Event:
The company released the 2021 annual report and the first quarterly report of 2022: in 2021, the company's operating revenue was 821 million yuan, a year-on-year increase of 1.55%, and the net profit attributable to the parent company was 163 million yuan, a year-on-year decrease of 25.91%; In the first quarter of 2022, the operating revenue was 135 million, a year-on-year decrease of 33.6%, and the net profit attributable to the parent company was 17 million, a year-on-year decrease of 76.34%.
Investment summary:
The operation was significantly affected by the epidemic and the decline of sales volume of main customers, and the profitability was affected by many factors, such as the rise in the price of raw materials, the investment in new products, the increase in R & D investment and so on. Affected by multiple factors such as the epidemic situation, limited production and power supply and the lack of core in the industry, the company's production, sales and inventory are in a downward trend, which directly affects the company's revenue scale; In addition, due to the rise in the price of raw materials such as cowhide, the low operating rate of new water-based super fiber and the increase in R & D investment (R & D rate 10.5%), the gross profit margin of the company decreased by 40.2% (- 7.8pct) and net profit margin by 19.9% (- 15.7pct) in 21 years; 22q1 was impacted by the epidemic in Tianjin, Changchun, Shanghai and other places, which directly affected the production and delivery of FAW Volkswagen (Tianjin, Changchun), the company's largest customer, and the designated new customers SAIC Volkswagen and SAIC GM (Shanghai), resulting in the decline of the company's revenue. We believe that as the epidemic situation is gradually controlled and the resumption of production is gradually started, 22q1 is the phased low point of the company and will gradually enter the recovery range.
The company has long benefited from the high-end demand brought by consumption upgrading. The new water-based super fiber optimizes the product layout, sets up an aesthetic center, and provides one-stop interior decoration solutions to deeply bind customers. The high-end demand brought by consumption upgrading has a positive stimulating effect on the company's leather and super fiber products. As an industry leader, the company has the advantages of fast response compared with foreign competitors, and will benefit from the high-end path of its own brand for a long time; The new water-based super fiber production line has been mass produced in 21 years, and contributed 52 million yuan of revenue in 21 years, accounting for 6%, continuously optimizing the company's product structure; In addition, the company continues to expand R & D investment, and cooperates with Tsinghua Academy of fine arts to establish an aesthetics center in Shanghai to provide integrated solutions for interior design and production, which will help the company develop new customers and close customer relations.
Repurchase shows the confidence of the company. The company announced that it plans to use its own funds or self raised funds to repurchase part of the company's A-share shares in the form of centralized bidding transaction. The total amount of funds to repurchase shares is not less than 100 million yuan, not more than 200 million yuan, and the proposed repurchase price is not more than 30 yuan / share. This shows the company's confidence in the future development prospects.
Investment suggestions:
We estimate that the company's operating revenue from 2022 to 2023 will be 1.06 billion yuan and 1.36 billion yuan respectively, and the net profit attributable to shareholders of listed companies will be 190 million yuan and 280 million yuan respectively, with corresponding PE of 17x and 12x respectively. At present, the company's cost performance has been highlighted and given a "buy" rating.
Risk tips:
The customer's car sales are less than expected, the development progress of new customers is less than expected, the cost of raw materials is increased, the epidemic control is less than expected, and the risk of intensified industry competition.
