\u3000\u3 Guocheng Mining Co.Ltd(000688) 100 Willfar Information Technology Co.Ltd(688100) )
Core view
Steady growth in performance. In the first quarter of 2022, the company achieved an operating revenue of 377 million yuan, a year-on-year increase of 19.36%; The net profit attributable to the parent company was 65 million yuan, a year-on-year increase of 22.54%; The net profit deducted from non parent company was 62 million yuan, with a year-on-year increase of 28.27%. In addition, the company achieved a net operating cash flow of 21.13 million yuan, a significant year-on-year increase of 320%.
There are plenty of orders on hand. At the beginning of 2022, the company has achieved excellent results with a total bid winning amount of more than 75 million yuan outside China. In 2022q1, in the third batch of bidding procurement (including power consumption information collection) added by the State Grid, the total bid winning amount of the company was about 42.15 million, ranking first overall, reflecting the strong comprehensive strength and technical level of the company. In addition, since the beginning of the year, the company has signed 573 million yuan of new orders, a year-on-year increase of 41.08%; By the end of the first quarter, the orders on hand were 1.846 billion yuan, laying a solid foundation for the growth of annual performance.
Continuous R & D investment. By the end of the first quarter, the company had 373 R & D personnel, accounting for 49.47% of the total employees. In 2022q1, the company’s R & D investment reached 33.73 million yuan, a year-on-year increase of 5.14%, realizing 14 new patents (including 4 invention patents) and 15 software copyrights.
Increased profitability. In the first quarter of 2022, the company achieved a gross profit margin of 32.47%, a year-on-year increase of 0.42pcts, and a net profit margin of 17.29%, a year-on-year increase of 0.47pcts. The company continuously optimizes the cost structure to achieve cost reduction and efficiency increase. In 2022q1, the company’s period expense rate was 15.62%, a year-on-year decrease of 1.27pcts, of which the sales expense rate / management expense rate / financial expense rate / R & D expense rate were 5.17% / 2.49% / -0.99% / 8.95% respectively, with a year-on-year change of -0.44 / -0.07/0.45/ -1.21pcts.
Profit forecast and investment suggestions
Combined with the company’s 2022q1 operation, this time we raised the R & D expense rate and lowered the gross profit margin of the application layer business. The company’s earnings per share in 22-24 years were adjusted to 0.94 yuan, 1.21 yuan and 1.61 yuan (the original earnings per share in 22-24 years were 0.99 yuan, 1.31 yuan and 1.68 yuan). Referring to comparable companies, we believe that the current reasonable valuation level is 24 times the P / E ratio in 2022, and the corresponding target price is 22.56 yuan, maintaining the buy rating.
Risk tips
Macroeconomic risks; Supply chain risk; Customer concentration risk; Rising risk of raw materials; Overseas epidemic risk.
