\u3000\u3 Shengda Resources Co.Ltd(000603) 516 Beijing Tricolor Technology Co.Ltd(603516) )
Key investment points
Event: on April 20, Beijing Tricolor Technology Co.Ltd(603516) released the annual report of 2021 and the first quarter report of 2022. Among them, the operating revenue in 2021 was 468 million yuan, yoy-3.01%; In 2022q1, the operating revenue was 67 million yuan, yoy-22.45%. In 2021, the net profit attributable to the parent company was 83 million yuan, yoy-35.22%; The net profit attributable to the parent company in 2022q1 was -08 million yuan, yoy-170.50%, and the performance was lower than our expectation.
In the second half of the year, the landing of large orders was less than expected, and the performance was under short-term pressure: in the first half of 2021, the sales orders kept growing year-on-year, but in the second half of the year, due to the less than expected landing of large orders, the operating revenue in 2021 decreased by 3.01% compared with the previous year; Due to the increase in labor costs, investment in self-developed chips and the increase in the comprehensive tax rate of corporate income tax, the net profit attributable to the parent company decreased by 35.22% compared with the previous year, including an increase of 260393 million yuan in employee salary, an increase of 106795 million yuan in various taxes paid, 661061 million yuan in R & D investment, and 14.12% in R & D expenses, an increase of 1.36pp compared with the previous year. In Q1 2022, due to the impact of the epidemic, there was still a decline and delay in new orders and project delivery. We believe that Beijing Tricolor Technology Co.Ltd(603516) short-term performance is under pressure due to the landing of orders, but we continue to be optimistic about the prosperity of audio and video business. Beijing Tricolor Technology Co.Ltd(603516) as the leader of audio and video display control, we are optimistic about the development of the company for a long time.
Seize the development opportunities of display and control market, strengthen the investment in technology and talents, and consolidate the leading advantage: with the introduction and implementation of new infrastructure, action plan, 14th five year plan, and ultra-high definition video Landing policies, the demand of display and control market has been expanded and the development momentum of industry students has been stimulated. At the same time, as a leading professional audio and video display and control solution provider in the industry, the company plays an indispensable role in the ultra-high definition video industry. At present, the company has continuously strengthened its investment in R & D and sales, and established a high coverage and rapid response marketing and operation and maintenance network; Two software and hardware R & D centers are set up in Beijing and Wuhan, and a chip R & D base is set up in Hefei to continuously improve the R & D capacity. 24 new patent applications were added in 2022, and the company has a number of industry-leading technologies in the field of display and control. At the same time, the company's self-developed chip project has been steadily promoted. In the future, the company will continue to increase investment in independent controllable audio and video processing chips and strive to improve the competitive advantage of domestic audio and video control products.
Profit forecast and investment rating: according to the latest financial report data and business situation, we will reduce the net profit attributable to the parent company from 251 million yuan and 335 million yuan to 123 million yuan and 152 million yuan in 20222023, and it is expected to be 191 million yuan in 2024, with EPS of 66 million yuan, 81 million yuan and 102 yuan respectively, and the corresponding PE valuations of 19x, 16x and 12x respectively. With the gradual enrichment of product types and the improvement of sales channels, we will benefit from the development dividend of the industry, We continue to be optimistic about the development of Beijing Tricolor Technology Co.Ltd(603516) in the future and maintain the "buy" rating.
Risk warning: the order demand of downstream customers is less than the expected risk; The company's technology update is less than the expected risk; After the expansion of the company's scale, the operation and management is less than the expected risk.
