\u3000\u3 Guocheng Mining Co.Ltd(000688) 100 Willfar Information Technology Co.Ltd(688100) )
Event overview: on April 19, the company released the first quarter report of 2022. The company realized an operating revenue of 377 million yuan in 22q1, 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%, and the net profit not attributable to the parent company was 62 million yuan, a year-on-year increase of 28.27%. In addition, the controlling shareholder Weisheng group plans to increase its total holdings of no less than 2.5 million shares and no more than 5 million shares within six months from April 20, 2022.
The business performance in the first quarter was brilliant, and the newly signed contracts achieved high growth. 1) 22q1 company's profitability further improved. The company's 22q1 gross profit margin increased month on month, and the 22q1 gross profit margin increased to 32.47%. During the period, the expense rate continued to decline year-on-year, and the 22q1 net profit margin rebounded to 17.29%. 2) 22q1 company has abundant operating cash flow. The operating cash flow of the company has maintained positive inflow for several consecutive quarters. The operating net cash flow of 22q1 company reached 21.13 million yuan, an optimization of 3.2 times year-on-year, providing sufficient guarantee for the stable development of the company's production and operation activities. 3) 22q1 company achieved high growth in newly signed contracts. 22q1 company signed 573 million yuan of new contracts, an increase of 41.08% year-on-year, and 1.846 billion yuan of contracts in hand. The company has sufficient momentum for subsequent growth.
The demand for digital transformation of power grid is rising, and the company has significant advantages in the whole industrial chain. In 2022, the scale of the global Internet of things industry will reach US $1.1 trillion, and the CAGR will be about 23% from 2019 to 2022. In 2022, the scale of China's Internet of things industry will reach 3.1 trillion yuan, of which the transformation demand in the power field ranks in the top three. The transformation space of smart meter terminals and other smart terminals is huge. Only the demand for standard exchange of the state grid may exceed 500 million, and the corresponding product market space of the company may exceed 30 billion yuan. The track has good growth and broad space. At present, the company has successfully laid out all levels of IOT communication chips, and the technical level of core products such as communication modules and communication gateways is leading. In the field of digital power grid, the company comprehensively ranks among the top in the centralized procurement bidding of power information collection materials projects of the State Grid and the South grid. In 2021, the company has been shortlisted as 23 provincial power companies, ranking second in market share. Driven by the rigid demand of the new power system, the company is expected to consolidate its leading position and maintain a high performance growth rate in the future.
Overseas + off-line market space is vast, further improving the growth space of the company. 1) one belt, one road, along the AMI, is the key to the overseas market. The comprehensive comparative advantage of products, technology and systems is highlighted. At present, the company has achieved breakthroughs in major markets such as Asia, Africa and South America, and the overseas market is expected to maintain a rapid growth rate. 2) In the market outside the power grid, the relevant demand of digital intelligent cities is rapidly releasing. The annual market capacity of smart water meters reaches 7-10 billion yuan, the market scale of smart gas, smart heat, smart well cover and smart street lamp exceeds 600 billion yuan, and the market scale of integrated energy management demand such as smart Park, integrated energy and energy efficiency monitoring and smart charging exceeds 400 billion yuan. The smart cloud platform of the company's Internet of things has covered the fields of smart Park, smart water, smart gas, smart fire fighting, smart power distribution and safety monitoring management and energy consumption information collection and management. With strong comprehensive strength, the business of digital smart city is expected to become an important growth pole of the company's business.
Investment suggestion: the company has abundant orders on hand and high downstream demand. We expect the company's revenue to be RMB 2.506 billion, RMB 3.478 billion and RMB 4.944 billion respectively from 2022 to 2024, with growth rates of 37%, 39% and 42%; The net profit attributable to the parent company was 469 million yuan, 663 million yuan and 961 million yuan respectively, with a growth rate of 38%, 41% and 45%. Taking the closing price on April 20 as the benchmark, the corresponding PE for 22-24 years was 20x, 14x and 10x. Maintain a "recommended" rating.
Risk warning: the risk of power grid investment and construction is less than expected; The risk that overseas market development is less than expected.
