\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 50 Luoyang Xinqianglian Slewing Bearings Co.Ltd(300850) )
Event: the company disclosed the annual report of 2021 and the first quarterly report of 2022: 1) 2021: revenue of 2.477 billion, yoy + 20.0%; The net profit attributable to the parent company is 514 million, yoy + 21.1%, the gross profit margin is 30.82%, yoy-0.37pct, the net profit margin is 20.79%, yoy + 0.22pct; 2) 2021q4: revenue 577 million, yoy-23.4%, net profit attributable to parent company 114 million, yoy-31.1%, gross profit margin 28.97%, yoy + 4.1pct, net profit margin 19.95%, yoy-2.1pct; 3) 2022q1: revenue 644 million, yoy + 14.7%; The net profit attributable to the parent company is 98 million, yoy + 34.0%. The gross profit rate is 34.7% YoY + 1pcy, and the net profit rate is 34.7% YoY + 1pcy.
Steady development in 2021, and the profitability of 2022q1 exceeded expectations. In 2021, the company’s turnover support business revenue was 2.26 billion, yoy + 19.23%, the sales volume was about 19500 pieces, yoy + 22.24%, and the average price was about 116000 yuan / piece, yoy-2.5%. The decline in the average price may be related to the price reduction of wind power double volleyball bearings in 2021; In 2021, the gross profit margin of rotary support business was 32.15%, yoy + 0.37pct. When the ton price decreased, the increase of gross profit margin mainly depended on the year-on-year decrease of 3.0% of the cost per ton: 1) the year-on-year increase of 4.8% of the direct material per ton may be related to the upward price of raw materials such as bearing steel; 2) The direct labor cost per ton and manufacturing cost per ton decreased by 8.7% year-on-year, reflecting a certain scale effect. The revenue of 2022q1 was 644 million, although the year-on-year growth rate was only 14.7%, but the revenue base of 2021q1 was high, so it was not easy to achieve positive growth. The gross profit margin increased by 7.1pct year-on-year, and the net profit margin increased by 2.7pct year-on-year, which may be mainly related to the increase in the proportion of main bearings and three row bearings with high gross profit margin.
Bearing leaders master the core technology and accelerate the layout of the industrial chain. Wind power bearing industry is a link with low production rate of large wind power components in China, and it is also a link that can avoid the pressure of price reduction under the trend of large-scale wind turbines. According to the data of woodmackenzie, by 2019, the core components of wind power in China have basically been localized, such as tower (localization rate 100%), generator (93%), engine room (89%), gearbox (80%), converter (75%), blade (73%), while the localization rate of main shaft bearing is only 33%, and the localization rate of pitch & yaw bearing is only 50%. Referring to the purchase unit price of Sany Heavy energy’s pitch yaw bearing and main shaft bearing and Luoyang Xinqianglian Slewing Bearings Co.Ltd(300850) announcement, we predict that the scale of China’s wind power bearing market is expected to increase from 19.22 billion yuan in 2020 to 22.63 billion yuan in 2023, including 10.56 billion yuan for main shaft bearing and 12.07 billion yuan for pitch yaw bearing. From the perspective of single MW investment, both main shaft bearing and pitch yaw bearing show an upward trend, getting rid of the pressure of price reduction under the trend of large-scale. At present, the company has formed batch production capacity for pitch bearing and yaw bearing of high-power wind turbine, and has become one of the main manufacturers in the industry; The main bearing of shield machine and key parts of shield machine are mass produced and replaced with imported ones; Large heavy-duty slewing ring forms mass production. 2021q1 disclosed that the top five customers are Mingyang (accounting for 38% of revenue), Yuanjing (22%), Xiangdian (13%), Xinneng bearing (10%) and sany (6%), which do not rely too much on a single customer. In addition, the company has acquired Haozhi machinery to lay out the gearbox locking disc link, and plans to issue convertible bonds to lay out the gearbox bearing link.
Investment suggestion: considering the good development momentum of various businesses of the company, it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 750 / 9.3 / 1.11 billion respectively, and the corresponding PE will be 25X / 20x / 17x respectively, maintaining the “recommended” rating.
Risk warning: the commissioning progress of the new project is lower than the expected risk, and the epidemic situation affects the demand for wind power.
