\u3000\u30 Fawer Automotive Parts Limited Company(000030) 43 Suzhou Huaya Intelligence Technology Co.Ltd(003043) )
Event: the company disclosed its annual report on April 18, 2022. In 2021, the company realized an operating revenue of 530 million yuan, a year-on-year increase of + 43.93%; The net profit attributable to the parent company was 111 million yuan, a year-on-year increase of + 54.67%; The net profit deducted from non parent company was 106 million yuan, a year-on-year increase of + 53.38%.
Key investment points
Single Q4 revenue growth accelerated, and production capacity increased quarter on quarter
In 2021, there was a shortage of supply in the semiconductor equipment industry chain, and the company’s production capacity improved quarter on quarter. In 2021, the revenue of single Q4 company reached 151 million yuan, a year-on-year increase of + 60%, an increase of 146 million yuan compared with that of single Q3; The net profit attributable to the parent company of single Q3 was 28 million yuan, an increase of 120% year-on-year. Compared with the net profit attributable to the parent company of single Q3 was 35 million yuan, which decreased slightly, mainly due to the fluctuation of Q4 profit margin. The expense rate in 2021q4 was 17.4%, up 9.5pct month on month compared with Q3, mainly due to the increase of employee salary and the change of exchange rate.
In terms of products in 2021, (1) precision metal structural parts: the total revenue is 520 million yuan, with a year-on-year increase of + 43.6%. We judge that it is mainly driven by the high prosperity of the company’s largest downstream semiconductor equipment. (2) Semiconductor equipment maintenance: the total revenue was 07 million yuan, a year-on-year increase of + 55.3%. The downstream customers of the company are mainly overseas semiconductor assembly plants such as chaokelin and ichor. The company’s overseas revenue was 310 million yuan, a year-on-year increase of + 80%; China’s revenue was 220 million yuan, a year-on-year increase of + 12%. We judge that the main reason is that the overseas market is in short supply.
Sufficient orders on hand to lay the foundation for performance growth in 2022
We judge that the company has sufficient orders on hand and the trend of capacity improvement is good, laying the foundation for performance growth in 2022: ① in 2021, the company’s net operating cash outflow was 400 million yuan, a year-on-year increase of + 49.6%, mainly due to the increase in the purchase of raw materials; ② At the end of 2021, the company’s inventory was 110 million yuan, a year-on-year increase of + 113.2% and a month on month increase of + 20.6%, mainly due to the increase of orders; ③ At the end of 2021, the company’s fixed assets were RMB 90 million, with a year-on-year increase of + 8.2% and a month on month increase of + 7.8%. The production capacity was increased from 21q4, laying the foundation for performance growth in 2022.
Maintain a high level of profitability and optimize the product structure
In 2021, the company’s comprehensive gross profit margin was 39.4%, with a year-on-year increase of -0.5pct; The net profit margin attributable to the parent company was 21.0%, with a year-on-year increase of + 1.5pct. The slight decrease in gross profit margin was mainly due to the rise in the prices of raw materials and shipping, and the high growth of high gross profit business hedged some of the negative effects. In 2021, the company’s expense rate during the period was 12.6%, with a year-on-year rate of – 2.4pct, of which the management / R & D / sales / financial expense rate was 6.3% / 3.2% / 2.0% / 1.1% respectively, with a year-on-year rate of + 0.1pct / – 0.7pct / – 0.8pc / – 0.9pct, highlighting the scale effect.
It is planned to issue no more than 340 million yuan of convertible bonds to expand production and welcome the golden development period in the next three years
On April 19, 2022, the company announced that it plans to issue convertible bonds to raise no more than 340 million yuan for the construction of new projects for intelligent production of precision metal parts in semiconductor equipment and other fields, which is expected to alleviate the company’s capacity bottleneck. The company has entered into the leading supply chain system of global semiconductor equipment such as Amat and Lam. In the future, it will continue to benefit from the expansion of downstream wafer factories and domestic replacement of parts, and welcome the golden development period of performance growth in the next three years.
Profit forecast and investment rating: the downstream prosperity of the company is good and the production capacity is released smoothly. We maintain the company’s net profit forecast of RMB 180 / 270 million from 2022 to 2023 and RMB 390 million in 2024. The current market value corresponding to PE is 25 / 17 / 11x respectively, maintaining the “overweight” rating.
Risk tip: fluctuation risk of semiconductor industry; Risk of decline in gross profit margin; Customer industry transfer risk
