\u3000\u30003 Anhui Fuhuang Steel Structure Co.Ltd(002743) 00274)
The company released the annual report of 2021 and the first quarterly report of 2022, with a year-on-year profit of – 19% / + 6% respectively. The company has a solid leading position in inverter, maintains high growth in energy storage, and makes greater efforts to layout overseas and Chinese distributed markets, which is expected to resume rapid growth; Maintain the overweight rating.
Key points supporting rating
The profit in 2021 decreased by 19% year-on-year: the company released the annual report of 2021. The annual revenue was 24.137 billion yuan, a year-on-year increase of 25.15%, the net profit attributable to the parent was 1.583 billion yuan, a year-on-year decrease of 19.01%, and the deduction of non net profit was 1.335 billion yuan, a year-on-year decrease of 27.72%. In 2021q4, the company realized a net profit attributable to the parent company of 78 million yuan, a year-on-year decrease of 89.73%, and a loss of 117 million yuan after deducting non profits.
2022q1 profit increased by 6% year-on-year: the company also released the first quarterly report of 2022, realizing a revenue of 4.568 billion yuan, a year-on-year increase of 36.48%, and a net profit attributable to the parent company of 411 million yuan, a year-on-year increase of 6.26%.
The impairment loss is relatively large, and the expense rate has increased: in 2021, the company’s asset impairment loss and credit impairment loss were withdrawn by 274 million yuan and 208 million yuan respectively, and the absolute value increased by 856.64% and 336.66% respectively year-on-year. The number of salespeople expanded by 44.53%, and the sales expense rate increased by 1.51 percentage points year-on-year to 6.56%. In 2022q1, the expense rate was further improved, with a year-on-year increase of 5.28 percentage points to 20.16%. The increase of impairment and period expenses has a certain adverse impact on the release of overall performance.
Photovoltaic inverter shipments continued to grow: in 2021, the company shipped 47gw of inverters, with a year-on-year increase of 34.29%, corresponding to a global market share of about 30%; The gross profit margin decreased by 1.23 percentage points year-on-year to 33.80%. We expect that the inverter market share of the company is expected to increase slightly in 2022, and the revenue will maintain rapid growth.
Rapid growth of energy storage business: in 2021, the company’s energy storage system delivered 3gwh, about 3.75 times that of the same period of the previous year, contributing revenue of 3.138 billion yuan, with a year-on-year increase of 168.51%. Affected by the price rise of raw materials and delayed delivery of projects, the gross profit margin of the sector decreased by 7.86 percentage points to 14.11% year-on-year. We expect that with the optimization of the company’s management, the gross profit margin may rise in 2022. At the same time, benefiting from the large demand, the company’s revenue scale is expected to continue to increase rapidly.
Valuation
Under the current share capital, combined with the company’s annual report, the first quarter report and the situation of the photovoltaic industry, we adjusted the predicted earnings per share of the company from 2022 to 2024 to 2.05/2.71/3.46 yuan (the original prediction of 20222023 was 2.87/3.61 yuan), corresponding to a P / E ratio of 35.2/26.6/20.8 times; Maintain the overweight rating.
Main risks of rating
The price rise of raw materials exceeded expectations; Price competition exceeds expectations; Covid-19 epidemic impact exceeded expectations; Photovoltaic policy does not meet expectations; Overseas trade barrier risk; The demand of energy storage industry did not meet expectations.
