\u3000\u3 Shengda Resources Co.Ltd(000603) 348 Wencan Group Co.Ltd(603348) )
The performance in 21 years is in line with expectations
The company issued the 2021 annual report. In 2021, the company achieved an operating revenue of 4.112 billion yuan, a year-on-year increase of + 58%; The net profit attributable to the parent company was 97 million yuan, a year-on-year increase of + 16%; Deduction of net profit not attributable to the parent company was 87 million yuan, a year-on-year increase of + 3%. 21q4 achieved an operating revenue of 1.147 billion yuan, a year-on-year increase of + 0.05% and a month on month increase of + 23%; The net profit attributable to the parent company was 28 million yuan, a year-on-year increase of + 193%, turning losses into profits month on month; Deduct the net profit not attributable to the parent company of 22 million yuan, a year-on-year increase of + 16%, and turn losses into profits month on month. The performance is in line with expectations.
Lack of core, repeated epidemics and rising raw materials put short-term pressure on China’s profits
After deducting the revenue of France Bailian, the company realized an operating revenue of 1.922 billion yuan in 2021, a year-on-year increase of + 20%. The revenue increase mainly came from Weilai orders. After deducting the impact of the acquisition of France Bailian and equity incentive, the company achieved a net profit of 73 million yuan in 2021, a year-on-year increase of – 52%, mainly due to: 1) the continuous lack of cores worldwide and the repeated overseas epidemic, which affected the implementation of orders for some products with high gross profit margin; 2) The price of raw materials rises, and the product price compensation lags behind.
New energy products and body structural parts performed well, and the business structure continued to be optimized
In 2021, the company’s new energy products and body structure products performed well. Excluding French refined products, the company’s new energy vehicle product revenue was 726 million yuan, a year-on-year increase of + 143%, accounting for 38% of the revenue; The revenue of the company’s body structural parts was 647 million yuan, a year-on-year increase of + 84%, accounting for 34% of the revenue.
With continuous efforts, the company is expected to grow into an integrated die-casting leader
One 6000t and 9000t die-casting machine of the company has started trial production of integrated body structural parts in 2021, and one 9000t die-casting machine is expected to start trial production in June 2022. The company continues to increase equipment investment and will purchase two 7000t die casting machines in 2022. With the rise of integrated die casting, the company is expected to stand out from die casting manufacturers with its leading advantages in equipment, molds, materials, processes and orders. In addition, it is expected to realize customer channel exchange and product mutual guidance with Bailian in the future.
Profit forecast and investment suggestions
The impact of the epidemic in China exceeded expectations. We lowered our profit forecast for 2022. It is estimated that the company’s revenue from 2022 to 2023 will be 5.34 billion yuan, 7.09 billion yuan and 9.07 billion yuan respectively, with a year-on-year increase of + 30%, + 33% and + 28% respectively; The net profit attributable to the parent company was 360 million yuan, 610 million yuan and 950 million yuan respectively, with a year-on-year increase of + 265%, + 73% and + 54% respectively; The current share price corresponding to PE is 24, 14 and 9 times respectively. Maintain the “buy” rating.
Risk tips
The price of raw materials fluctuated, the supply of chips was tight, and the impact of the epidemic exceeded expectations
