\u3000\u3 Shengda Resources Co.Ltd(000603) 348 Wencan Group Co.Ltd(603348) )
Events
The company released its annual report for 2021. In 2021, the company’s revenue was 4.11 billion yuan, a year-on-year increase of + 58%; The net profit attributable to the parent company was 97million yuan, a year-on-year increase of +16%. Among them, Q4 revenue was 1.15 billion yuan, flat year-on-year; The net profit attributable to the parent company was 28 million yuan, a year-on-year increase of + 193.4%.
Key investment points
The revenue of the headquarters is + 20%, of which the revenue of body structural parts is + 84%
In 2021, the company’s revenue was 4.1 billion yuan, yoy + 58%, of which Bailian Group was 2.19 billion yuan, which changed greatly. It was the new consolidated income from January to July in 21 years; The revenue of Wencan headquarters is 1.92 billion yuan, yoy + 20%, with a corresponding increment of about 320 million. The main increment is the body structure business. The 21-year revenue of body structure is 650 million yuan, with a year-on-year increase of + 84%. The main increment is contributed by NiO.
Multiple factors suppressed the profitability in 2021, but the Q4 profit recovered significantly month on month
In 2021, the company’s gross profit margin was 18.5%, year-on-year -5pct, which was due to the consolidation of the whole year of Bailian + unilateral sharp rise in aluminum price + freight price rise + mass production reduction due to lack of core. Regardless of equity incentive + M & A integration fee + M & A interest (totaling more than 60 million), the impact of the net interest rate of the Department is equivalent to the gross profit rate; Regardless of PPA + spa expenses, the net interest rate of Bailian Group is about 5%, maintaining a consistently excellent operation. Among them, Q4’s profit has been significantly repaired month on month. Q4’s gross profit margin is 18.87%, month on month + 3PCT, and the net profit attributable to the parent company is 28 million yuan. Compared with Q3, Q3 has made a significant turnaround, thanks to the increase of production and marketing scale, the decline of aluminum price and the appearance of customer price adjustment.
The industrialization process of integrated die casting is accelerated, and the company is optimistic about customer development
The integrated die-casting process was initiated by Tesla, which has the advantages of cost reduction (streamlining the production process chain), lightweight and rapid improvement of production efficiency. Under the demonstration of Tesla, the whole industry is setting off an integrated die-casting process revolution. In 21 years, only Tesla mass production and Weilai want to follow up clearly. In 22 years, Xiaopeng, Gaohe, SAIC Zhiji, Huawei, Xiaomi, Ford and Volkswagen are expected to follow up one after another, and the market will expand rapidly, Potential 100 billion market. In 21 years, the product only has the rear seat sector, and in 22 years, the process will be extended to the field of front compartment and battery tray. The integrated die casting process is a systematic barrier, and only the product links have systematic ability, which is reflected in the demand for materials, equipment and molds and the comprehensive control ability. In essence, the integrated body is a larger and more integrated body part. Wencan is the absolute leader in the field of aluminum die-casting body parts in China. In 2011, the layout was led by Mercedes Benz. It has supplied many high-end brands in 10 years and accumulated rich process experience. From the verification of the order results, the company is ahead of its global counterparts and has obtained many new forces’ integrated orders. We judge that the company will become the leader of integrated die-casting body parts with the advantages of 10 years of large-scale aluminum die-casting body parts and rapid layout. Recently, the trial production of 9000t integrated rear seat sector was successful (a designated project last year). At the same time, the company plans to purchase 9 large die-casting machines from Lijin technology, including 270000t. The number of large die-casting machines above 6000t in place and planned to be purchased by the company is 6, with sufficient orders on hand.
Profit forecast and valuation
The company is the leader of large-scale aluminum die-casting body parts in China. Under Tesla leading the whole industry to set off an integrated die-casting process revolution, the company is expected to become the leader in the integrated die-casting field. At the same time, the company’s product line has undergone important changes since 2020, adding chassis, big three electricity and battery tray / energy storage box products to fully embrace new energy and open growth. Considering the impact of the epidemic in China and the conflict between Russia and Ukraine, based on the principle of prudence, the profit in 22 years was adjusted to 284 million yuan, the profit in 23 years remained unchanged, and the profit in 24 years was 780 million yuan. The growth rate of net profit attributable to the parent company in 22-24 years was 192.4% / 110.7% / 30.8%, corresponding to the current pe29.5% 8 / 14.1 / 10.8x, maintaining the “buy” rating.
Risk tips: the recovery of the epidemic is not as expected, the conflict between Russia and Ukraine affects overseas production and marketing and costs, and the rise of aluminum prices
