\u3000\u3 Guocheng Mining Co.Ltd(000688) 516 Wuxi Autowell Technology Co.Ltd(688516) )
Event: the company announced that in the first quarterly report of 2022, the revenue was 625 million yuan, a year-on-year increase of + 70%; The net profit attributable to the parent company was 107 million yuan, a year-on-year increase of + 109%.
Key investment points
Benefiting from the high prosperity of the industry, the leading performance of component equipment continued to exceed expectations: 2022q1 company achieved a revenue of 625 million yuan, a year-on-year increase of + 70% and a month on month increase of + 1%; The net profit attributable to the parent company was 107 million yuan, with a year-on-year increase of + 109% and a month on month increase of – 25%, mainly due to the higher net income from other income and changes in fair value in 2021q4.
The gross profit margin increased steadily, and the net profit margin improved significantly year-on-year: the gross profit margin of 2022q1 company was 38.6%, year-on-year + 1.1pct, month on month + 2pct, and the order quality was significantly improved; The net interest rate was 16.2%, with a year-on-year increase of + 2.4pct. The net interest rate increased significantly under the scale effect, and the net interest rate was – 7pct month on month, mainly due to the higher net income from other income and changes in fair value in 2021q4. During 2022q1, the expense rate was 19.2%, with a year-on-year rate of -3.7pct and a month on month rate of + 5.1pct. Among them, the sales expense ratio was 4.6%, with a year-on-year ratio of -0.8pct and a month on month ratio of + 1.6pct; The management expense ratio (including R & D) was 14.2%, with a year-on-year ratio of -0.9pct and a month on month ratio of + 3.0pct; The financial expense ratio was 0.4%, with a year-on-year ratio of – 2.1pct and a month on month ratio of + 0.5pct.
Contract liabilities & inventories increased sharply, new orders were full, and the performance was uncertain: by the end of 2022q1, the company’s contract liabilities were 1.33 billion yuan, a year-on-year increase of + 63.6%; The inventory was 2.32 billion yuan, a year-on-year increase of + 66%. The main reason is that the company has sufficient orders. The newly signed orders in 2022q1 are 1.44 billion yuan (including tax), a year-on-year increase of + 85% and a month on month increase of + 1.4%; By the end of 2022q1, the company’s orders on hand were 4.89 billion yuan (including tax), a year-on-year increase of + 77%. The company’s orders have increased greatly. We judge that the main reason is that the downstream component factory expects that the demand of the downstream terminal market will recover rapidly after the silicon material price falls, so it will layout the equipment and expand the production in advance, while the series welding machine needs 3 months from order to delivery and 1-2 months from delivery to commissioning. Therefore, the component factory Q1 has begun to arrange the equipment and expand the production. We expect that the expansion of the component factory will continue to flourish with the recovery of terminal demand throughout the year; According to our calculation, the total newly signed orders of the company from 2022 to 2023 will reach 5.6 billion yuan and 7.7 billion yuan respectively.
With rich technical reserves, it has grown into an automation platform company spanning photovoltaic, lithium battery and semiconductor: (1) semiconductor bonding machine: on April 6, 2022, Wuxi Autowell Technology Co.Ltd(688516) won the order of Tongfu Microelectronics Co.Ltd(002156) batch bonding machine, which was recognized by the head customer, and the localization of bonding machine was accelerated. (2) Photovoltaic field: single crystal furnace obtains GW order; Sintering annealing furnace (light injection) gradually increases in volume with the expansion of the market scale of n-type battery chip (TOPCON); Smbb ultra-fine wire multi main grid series welding machine has won large orders from well-known photovoltaic enterprises. (3) Lithium battery equipment: it is a high growth business with a low base. In 2021, it won the order of 130 million yuan for honeycomb (module pack line). In the future, it will also lay out laminating machines to benefit from the large volume of special machines.
Profit forecast and investment rating: with the continuous prosperity of photovoltaic module equipment + smooth expansion of new fields, we maintain the company’s net profit attributable to the parent company from 2022 to 2024 to be RMB 550 / 79 / 1.1 billion respectively, corresponding to 36 / 25 / 18 times of the current share price PE, maintaining the “buy” rating.
Risk tip: the expansion of new products is less than expected, and the expansion of downstream production is less than market expectations.
