\u3000\u3 Guocheng Mining Co.Ltd(000688) 100 Willfar Information Technology Co.Ltd(688100) )
Event: the company released the first quarter report of 2022, achieving a revenue of 377 million yuan, a year-on-year increase of 19.36%, and a net profit attributable to the parent company of 65 million yuan, a year-on-year increase of 22.54%. The newly signed contracts of the company in the first quarter were 573 million yuan, an increase of 41.08% year-on-year. As of the end of the reporting period, the contracts in hand were 1.846 billion yuan.
In the first quarter, we overcame difficulties and continued to improve business quality. In the first quarter, the company realized a net profit deduction of 61.8 million yuan, a year-on-year increase of 28.27%, the gross profit margin and net profit margin were 32.5% and 17.3% respectively, slightly higher than the same period, and the operating cash flow was 21.13 million yuan, a significant year-on-year increase of 320%. In the first quarter, the company overcame various difficulties such as the epidemic situation and continued to maintain high-quality operation. In the supplementary bidding of 2021 centralized procurement of State Grid headquarters in February, the bidding of materials for centralized procurement of power information occupied the first market share. The company’s orders on hand are close to 1.85 billion yuan, laying a solid foundation for the growth of annual performance.
Solid accumulation of product technology has opened up room for growth in overseas markets. By the end of the reporting period, the company had obtained 669 valid patents, 771 software copyrights and 11 exclusive rights of integrated circuit layout design. The company’s products cover many fields such as power monitoring, intelligent water affairs, communication module gateway and energy Internet. It is one of the few manufacturers in China that can provide chips, centralized core data acquisition, communication gateway equipment, big data analysis and application and specific solutions. Based on the advantages of technology and products, the company has actively expanded overseas markets. In the past two years, the company’s overseas business has achieved rapid growth, and its sales network covers markets such as Asia, Africa and the Americas. With the sustained and rapid growth of overseas markets and the steady improvement of China, the company is expected to achieve sustainable growth.
With the advent of a new era of carbon neutralization, the industry may meet the explosion. “Carbon neutralization and carbon neutralization” has become one of the key tasks of economic work. Building a new power system with new energy as the theme has become an important measure to achieve “carbon peaking and carbon neutralization”. Intelligent power grid and digital power grid are important means and aspects to realize carbon neutrality. We judge that the current power Internet of things is at the inflection point of technology upgrading and demand explosion, and it is expected to usher in rapid development in the next few years. In addition, outbreaks, floods and other emergencies have increased the difficulty and requirements of urban management. The development of smart cities has accelerated. The demand for intelligent upgrading in many fields, including water and fire protection, will gradually strengthen, and the industry is facing a new round of outbreak.
Investment suggestion: the company is the subject of the scarce energy Internet of things of the science and innovation board, with stable management and stable operation. The revenue and profit have achieved sustained growth in the past few years. The company is expected to seize the “double carbon” opportunity and fully benefit from the digital transformation of the power grid and the intelligent upgrading of the distribution side. We expect that the company’s revenue from 2022 to 2024 will be RMB 2.28/28.6/3.59 billion respectively, and the net profit will be RMB 4.4/5.65/712 million, corresponding to eps0.1 billion 88 / 1.13 / 1.42 yuan, with corresponding valuations of 19.9 / 15.5 / 12.3 times respectively, maintaining the “buy” rating.
Risk warning: market competition intensifies; High concentration of downstream customers; The digitization process of energy and power grid is less than expected.
