\u3000\u3 Shengda Resources Co.Ltd(000603) 348 Wencan Group Co.Ltd(603348) )
In 2021, the company’s revenue increased by 58% to 4.112 billion yuan, and the net profit attributable to the parent company increased by 16% to 97 million yuan. The company released its 2021 annual report. In 2021, the company achieved a revenue of 4.112 billion yuan (year-on-year + 58.0%), a net profit attributable to the parent company of 97.17 million yuan (year-on-year + 16.0%), a gross profit margin of 18.5% (year-on-year – 5.1pcts) and a net profit margin of 2.4% (year-on-year – 1.1pcts). The revenue of 2021q4 was 1.147 billion yuan (year-on-year + 0.05%, month on month + 23.0%), and the net profit attributable to the parent was 28.34 million yuan (year-on-year + 193.4%, month on month). We believe that as the leader of body structural parts, the company has obvious first mover advantage of integrated die casting, and the mass production of new products such as battery boxes also contributes to the growth power. It is expected that with the stabilization of raw material prices and the release of scale effect after the stable mass production of new products, the company’s performance is expected to improve rapidly. Considering the impact of the epidemic since 2022, we lowered the company’s profit forecast for 20222023 and added a new company for 2024. It is estimated that the net profit attributable to the parent company in 20222024 will be 2.24/4.71 (original value: 2.98 / 4.99) / 762 million yuan, EPS will be 0.86/1.80/2.91 yuan / share, corresponding to the current PE price of 37.7/18.0/11.1 times, maintaining the “buy” rating.
The operation of Bailian was stable throughout the year, the revenue of the headquarters maintained growth, and the profitability is expected to be repaired
In 2021, Wencan headquarters achieved a revenue of 1.922 billion yuan (year-on-year + 20.1%), and France Bailian achieved a revenue of 2.190 billion yuan. Bailian operated steadily throughout the year and contributed to its main performance (net profit of 80.46 million yuan in 2021h1). In terms of headquarters, the increase of revenue mainly comes from the large volume of Weilai orders, while the decline of profitability is mainly due to the production reduction of Volkswagen and other customers affected by the lack of core and the rise of raw material prices, and the lag of customer price adjustment / compensation. In 2021q4, the gross profit margin of the company was 18.9%, a month on month increase of +3.0pcts, showing an improvement trend.
Integrated die-casting is in hand, with rich orders, and continue to purchase large tonnage die-casting machines to consolidate their advantages
In 2021, the company achieved a revenue of 650 million yuan (year-on-year + 83.7%), accounting for 33.7% of the revenue after deducting Bailian; New energy products achieved a revenue of 730 million yuan (year-on-year + 143.3%), accounting for 37.8% of the revenue after deducting Bailian. In the field of integrated die-casting, the company has obtained the fixed point of two new forces’ integrated rear base sector, front assembly and integrated CD column products, and has successfully trial produced half piece / integrated rear base sector products with 6000t and 9000t die-casting equipment. It will be mass produced successively from the second half of 2022. The company plans to order 9 large die casting machines including 2 sets of 7000t equipment from Lijin in 2022 to consolidate its advantages.
Risk warning: the sales volume of main customers is lower than expected, the epidemic situation is repeated, and the price of raw materials is rising.
