\u3000\u3 Guocheng Mining Co.Ltd(000688) 516 Wuxi Autowell Technology Co.Ltd(688516) )
Events
On April 18, 2022, the company issued a performance announcement for the first quarter of 2022. In Q1, the company achieved an operating revenue of 625 million yuan, a year-on-year increase of + 70.25% and a month on month increase of + 0.97; The net profit attributable to the parent company was 107 million yuan, a year-on-year increase of + 109.49%; The month on month ratio was – 25.17%, in line with our expectations.
Performance review
The newly signed orders reached a new high in a single quarter, and the profit quality was further improved: the newly signed orders of the company in Q1 2022 were 1.44 billion yuan, a month on month increase of + 1.55%; Orders on hand were 4.894 billion yuan, a month on month increase of + 14.99%. Considering that since the Russian Ukrainian war, many European countries have successively issued relevant policies to support the construction of renewable energy power generation capacity to improve energy independence, as well as the cost advantages of photovoltaic power generation, we judge that the expansion of module production will continue the high boom. In terms of profit quality, the company’s Q1 gross profit margin was 38.62%, up + 2.03pct month on month, mainly driven by the continuous optimization of product structure; The net interest rate was 16.24%, with a month on month ratio of -7.04pct. Due to the certain impact of government subsidies and changes in fair value on Q4 profits, the decline of net interest rate is normal, and the net interest rate of Q1 still increased by 0.12pct compared with Q3 in 2021.
Seizing the opportunity of n-type technology iteration, the series welding machine is expected to continue to enjoy technical dividends: in recent years, new materials and technologies have been introduced into the battery chip and component packaging process, and the performance of the series welding machine needs to be continuously improved and improved. In terms of new battery technologies such as TOPCON, hjt and IBC, the company has new series welding machine process reserves, and has introduced products into the client for mass production application. We expect that the advantages of the company’s series welding machine will continue in the era of mass production of n-type technology.
The profit of lithium battery business has gradually improved, and the business has been extended to the laminating machine to expand the market space: the gross profit margin of the company’s lithium battery business has improved year by year, and won the order of honeycomb energy pack line in 2021, becoming a supplier of well-known enterprises in the field of new energy. The customer structure has been continuously optimized and the profitability has been further improved. At the same time, the company’s fund-raising project extends to the manufacturing of power battery cells, and the layout of laminating machine further expands the market space of lithium battery business.
The semiconductor bonding machine has achieved a major breakthrough, and the second growth curve is clear: the company’s self-developed semiconductor aluminum wire bonding machine won Tongfu Microelectronics Co.Ltd(002156) small batch orders in March 2022. At present, China’s high-end wire bonding machines basically rely on imports, and there is a huge space for domestic substitution. The company’s bonding machine will theoretically shorten the order cycle in the future after being recognized by the head customer. It is expected that the company will accelerate the landing of bonding machine orders this year.
Profit adjustment and investment suggestions
According to the company’s orders in hand and the latest business progress, it is predicted that the company’s net profit from 20222024e will be RMB 550 million, 750 million and 890 million respectively, the corresponding EPS will be RMB 556, 7.63 and 9.06 respectively, and the corresponding PE will be 36, 26 and 22 times respectively, maintaining the “buy” rating.
Risk tip: the penetration of new technologies is less than expected, the progress of R & D is less than expected, and there is a risk of lifting the ban on restricted shares.
