\u3000\u3 Guocheng Mining Co.Ltd(000688) 039 Hangzhou Arcvideo Technology Co.Ltd(688039) )
Core view
Event: on April 15, 2022, the company disclosed the annual report of 2021. The company realized an operating revenue of 418 million (+ 14.30%), a net profit attributable to the parent company of 613475 million yuan (- 40.34%), and a net profit deducted of 507052 million yuan (- 36.27%).
The company's Pan security business is growing rapidly, and overseas large orders are expected to have a positive impact on the performance of 22 years. In 2021, the company achieved an operating revenue of 418 million (+ 14.30%), achieving steady growth, of which Q4 revenue growth (+ 7.04%) was better than Q3 (- 16.54%). From the perspective of products, the company's main business: 1 the company's video solution products achieved a revenue of 251 million (- 6.11%), which decreased slightly due to the delayed collection of some projects caused by the epidemic, with a gross profit margin of 52.64% (- 3.57pct). The slight decline in gross profit rate was due to the rise of hardware procurement cost; 2> The company's Pan security products achieved a revenue of 123 million yuan (+ 79.47%), and the gross profit margin was 53.90% (+ 15.33 PCT). The rapid increase in gross profit margin was due to the continuous volume of the company's standardized edge computing terminal products; 3> The company's technical service revenue was 43 million yuan (+ 50.05%). On January 10, the company announced that it had signed a US $17.93 million product sales contract with Yichao (Asia Pacific) Co., Ltd. if the project is carried out smoothly, it is expected to have a positive impact on the company's business performance in 22 years.
The company continues to increase R & D investment and actively explore new business scenarios. In 2021, the company's comprehensive gross profit margin was 48.30% (-1.34pct), and its profitability was relatively stable. In terms of expense ratio, the company's sales expense ratio is 8.29% (+ 1.72 PCT), mainly because the company has strengthened channel construction and market expansion; The company's management expense ratio is 7.36% (-0.86pct); The R & D expense rate of the company was 21.75% (+ 4.83%), which was mainly due to the company's increasing R & D investment in various product technology lines. In 2021, the company's R & D expenditure was 91 million yuan (+ 46.89%), and by the end of the year, the proportion of R & D personnel was as high as 70.15%. The company continues to carry out technological innovation in the two fields of media culture and pan safety, and actively invests in the research and development of cutting-edge technologies related to on-board intelligent entertainment cockpit in the field of intelligent vehicles. With the implementation of new products in the future, the company's business scenario is expected to continue to expand.
5g edge computing terminal products have a wide range of application scenarios, and the company has the ability to provide comprehensive solutions in the field of Pan security. The 5g edge computing terminal launched by the company can compress the video to 10% of the bandwidth for transmission, which can save the transmission and storage costs for customers on the premise of ensuring the video quality. At present, there are pilot projects in schools, hospitals, public security, rail transit, iron towers, energy, mines, Bank Securities and other financial institution outlets. In addition, the integrated solution of "edge cloud collaboration" provided by the company in the field of Pan security connects the video front-end - central end - edge end and bottom layer - operation layer, which can share the cloud functions that originally need high-end GPU servers to a more suitable edge environment, greatly improve the one-way cost performance of video access, analysis and data application, and fully enable the stock cameras in society, with a wide range of application scenarios.
Profit forecast and investment suggestions
According to the annual report of the company in 2021, we believe that the company will maintain steady growth in the future. As the growth rate of the company's video solution products, gross profit margin and public safety products are lower than expected, we predict that the company's earnings per share in 20222024 will be 1.02, 1.29 and 1.62 yuan (the original forecast of 22-23 years is 2.36 and 3.17 yuan). With reference to the price earnings ratio of 45 times in 2022 given by the comparable company, the corresponding target price is 45.90 yuan, maintaining the buy rating.
Risk tips
The landing of Ultra HD was less than expected, and the development of Pan security business was less than expected.
