\u3000\u3 China Vanke Co.Ltd(000002) 925 Xiamen Intretech Inc(002925) )
Key investment points
Event 1: the company issued the 2021 annual report. The company achieved a revenue of 7.06 billion yuan in 2021, a year-on-year increase of 33%; The net profit attributable to the parent company was 1.093 billion yuan, a year-on-year increase of 6.6%; The non net profit deducted was 959 million yuan, a year-on-year increase of 6.0%. In a single quarter, 21q4 achieved a revenue of 1.451 billion yuan, a year-on-year increase of – 25.9%; The net profit attributable to the parent company was 205 million yuan, a year-on-year increase of – 39.1%; The non net profit deducted was 157 million yuan, a year-on-year increase of – 45.7%.
Event 2: the company released the first quarterly report of 2022. The company achieved a revenue of 1.292 billion yuan in 22q1, a year-on-year increase of – 20.6%; The net profit attributable to the parent company was 155 million yuan, a year-on-year increase of – 39.3%; The non net profit deducted was 132 million yuan, a year-on-year increase of – 45.1%.
Profitability is under pressure and is expected to bottom up. 1) On the profit side, the company achieved a gross profit margin of 27.97% (- 5.78 PCT.) in 2021, The net interest rate attributable to the parent company is 15.48% (-3.82pct.), 22q1 gross profit margin 27.64% (- 1.4pct.), Net interest rate attributable to parent company (pct-733.3%), We judge that it is mainly due to the depreciation of the US dollar, the rise of raw materials and sea freight, the change of product structure and other factors. Looking forward to 2022, the above external factors are expected to be marginal eased. With the company’s new product iteration and the implementation of lean production, the profitability is expected to bottom out and rebound. 2) On the expense side, the rates of sales, management, R & D and financial expenses in 2021 are 1.27%, 4.09%, 5.38% and 0.45% respectively, + 0.29, + 0.62, -0.35 and -1.24pct.
Innovative consumer electronics: the business of engraving machine is adjusted, and e-cigarette has entered the field of core components. In 2021, the revenue was 4.305 billion yuan (+ 34.7%), and the gross profit margin was 30.2% (- 7.9pct.), As the epidemic benefited from the peak of overseas demand in the same period last year, we calculated that the income of 21q4 and 22q1 was about – 34% and – 22% year-on-year. In 2021, Cricut, the company’s largest customer, realized the revenue of engraving machines and other equipment of $548 million (+ 31.6%), and Q4 increased by about 12%. Although the short-term sales growth rate fell, from the perspective of the number of users, there were 6.41 million registered users (+ 48.3%) in Cricut community at the end of 21, and the global user Sam penetration rate was only 5%. There is a broad space for long-term growth of major customers. In terms of e-cigarette business, affected by the replacement of HNB products of major customer Philip Morris International, the business volume of precision plastic parts supplied by the company has declined. We expect that with the deepening cooperation between the company and Philip Morris International, the new generation products will enter the field of core components, and the e-cigarette business is expected to restart and grow.
Intelligent control components: large customer reserves are abundant, and diversified products are expected to gradually increase. In 2021, the revenue was 1.079 billion yuan (+ 12.9%), and the gross profit margin was 22.2% (- 3.0pct.), We calculate that the revenue of 21q4 and 22q1 is about – 9% and – 15% year-on-year. Due to the decline in demand after the epidemic, the revenue of water cooling and heat dissipation control system decreased significantly year-on-year. In the long run, the company’s intelligent control parts business benefits from the consumption upgrading trend. The cooperative products of downstream Logitech, Bosch and other major customers are in the early stage of large volume, and the performance growth can be expected.
Other products: automotive electronics and plant planters have a bright growth rate. In 2021, the revenue of health and environmental products was 647 million yuan (+ 19%), and it is estimated that the revenue of 21q4 and 22q1 was about – 45% and – 44% year-on-year, mainly due to the decline in the demand for air purifiers after the epidemic, but the plant planters benefited from the legalization of overseas special cash crops, and the product orders continued to grow rapidly. The revenue of automotive electronic products in 2021 was 236million yuan (+42%), and it is estimated that the revenue of 21q4 and 22q1 is about +50% and +77% year-on-year, mainly due to the rapid growth of orders for automotive seat memory module, sunroof control module and electronic anti glare mirror products.
UDM’s business model has outstanding advantages and its international operation ability has been continuously improved. The company continued to consolidate the advantages of UDM business model and increased resource investment in product R & D and design, intelligent manufacturing capacity and other fields such as industrial control, vehicle regulation and medical treatment 0 strategy has made a good start. After years of accumulation, the company has formed a layout in China, Southeast Asia and Europe. The production capacity of Malaysia’s intelligent manufacturing base has reached more than 30%, and the international operation capacity has been continuously improved.
Investment suggestion: the company has outstanding intelligent manufacturing capacity and is expected to continue to benefit from the large volume of diversified products. We estimate that the company will realize operating revenue of RMB 8.06 billion, RMB 9.97 billion and RMB 12.24 billion from 2022 to 2024, with a year-on-year increase of 14.2%, 23.6% and 22.4%, and realize net profit attributable to parent company of RMB 1.26 billion, RMB 1.68 billion and RMB 2.19 billion (the demand peak in the early stage and the demand decline after the epidemic of main products. Adjust the profit forecast. The previous forecast value in 20222023 was RMB 1.48 billion and RMB 1.79 billion), with a year-on-year increase of 15.5%, 33.0% and 30.6%. The corresponding EPS is 1.61, 2.14 and 2.80 yuan, maintaining the “buy” rating.
Risk tips: raw material supply risk, exchange rate change risk, downstream consumption trend switching risk, international trade risk
