\u3000\u3 Guocheng Mining Co.Ltd(000688) 516 Wuxi Autowell Technology Co.Ltd(688516) )
Event:
The company issued the first quarter report of 2022.
Comments:
The performance increased significantly in the first quarter of 2022. In the first quarter of 2022, the company achieved a total operating revenue of 625 million yuan, a year-on-year increase of 70.25%; The net profit attributable to shareholders of listed companies was 107 million yuan, a year-on-year increase of 109.49%; The weighted average return on net assets was 7.27%, an increase of 2.7 percentage points year-on-year. Benefiting from the production expansion and technical iteration of downstream photovoltaic modules, batteries, silicon wafers and lithium battery enterprises, the procurement of the company’s multi main grid series welding machine, silicon wafer sorter, sintering annealing furnace and lithium battery module equipment increased, and the company’s operating revenue and net profit increased rapidly. In 2022q1, the gross profit margin of the company’s sales was 38.62%, an increase of 1.07 percentage points year-on-year; The sales expense rate, management expense rate and financial expense rate were 4.63%, 14.16% and 0.42% respectively, with a year-on-year decrease of 0.79%, 0.85 and 2.06 percentage points respectively. The decline of the company’s expense rate is estimated to be related to the improvement of operating efficiency and scale effect. The company’s net profit margin on sales was 16.24%, up 2.37 percentage points year-on-year, reflecting the improvement of the company’s profitability.
Q1’s orders on hand reached a new high, and 2022’s performance growth is highly uncertain. In terms of photovoltaic equipment, the company’s photovoltaic series welding machine and silicon wafer sorter have strong market competitiveness, and the market share is far ahead. In 2021, the company’s large-size, ultra-high-speed multi main grid series welding machine, silicon wafer sorter, sintering and annealing integrated furnace (light injection), non-destructive dicing machine and other photovoltaic equipment were recognized by downstream customers; Lithium battery module / pack production line has obtained a single order for the first time, with an amount of more than 100 million yuan; Verification and trial of semiconductor bonding machine in multiple clients; Songporcelain electromechanical single crystal furnace obtained batch orders and won the bid for Yuze semiconductor’s 300 million yuan 1600 single crystal furnace procurement project. In the first quarter of 2022, the company signed new orders of 1.44 billion yuan, a year-on-year increase of 84.62%; The number of orders on hand at the end of the period was 4.894 billion yuan, a year-on-year increase of 77%. Considering that the acceptance cycle of various equipment orders of the company is within one year, sufficient orders lay the foundation for performance growth.
Enrich product categories and make concerted efforts in many fields. The company continues to extend its business to the fields of battery chips, silicon chips, lithium batteries and semiconductor processing equipment. The company’s newly developed smbb ultra-fine welding wire multi main grid series welding machine has won large purchase orders from well-known component enterprises. It has cut into the field of battery equipment through the research and development of sintering and annealing integrated furnace (light injection). The lithium battery module / pack production line has obtained large orders for honeycomb energy. The semiconductor bonding machine has been verified and tested in many customers and obtained the first batch of orders. We believe that by providing a variety of photovoltaic production equipment and layout in the field of lithium batteries and semiconductors, the company realizes the expansion of equipment production business such as single crystal furnace and bonding machine, which is conducive to breaking the market space limit of a single product and improving the comprehensive strength of the enterprise.
Implement equity incentive to attract and bind talents. The company plans to implement the restricted stock incentive plan in 2022, with a grant amount of 950000 shares and a grant price of 110 yuan / share. The grant objects are directors, senior managers and core technicians working in the company (including branches and subsidiaries). Performance evaluation benchmark at the company level: Based on the net profit in 2021, the net profit growth rate in 2022, 2023 and 2024 shall not be less than 50%, 100% and 150%. On the one hand, the restricted stock incentive plan covers the core employees of the company, which can bind the same interests and stimulate the vitality of the enterprise; On the other hand, the performance appraisal benchmark set is high, which is conducive to protecting shareholders’ rights and interests.
For the first time, give the company an “overweight” investment rating. Without considering the dilution of non-public offering shares for the time being, it is expected that the company’s fully diluted EPS in 2022 and 2023 will be 5.47 yuan / share and 7.61 yuan / share respectively. Calculated according to the closing price of 213.44 yuan / share on April 20, the corresponding PE will be 39.05 and 28.06 times respectively. Considering the leading position of the company in the field of series welding machine and silicon wafer sorter, it will fully benefit from the growth of capital expenditure in the field of components and silicon wafers. At the same time, the company will expand its business scope to the fields of single crystal furnace, sintering and annealing furnace, semiconductor bonding machine and so on, and the development space of the enterprise will be further opened. For the first time, give the company an “overweight” investment rating.
Risk tip: the prosperity of photovoltaic industry is less than the expected risk; Risk that the market expansion progress of new products is less than expected; Risk of lifting the ban on restricted shares.
