\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 26 Zhuzhou Hongda Electronics Corp.Ltd(300726) )
Event: the company released its 2021 annual report, and achieved a revenue of 2 billion yuan in the whole year, with a year-on-year increase of 42.79%; The net profit attributable to the parent company was 816 million yuan, a year-on-year increase of 68.68%. Among them, the operating revenue of non tantalum capacitor business is 830 million yuan, with a year-on-year increase of 52.77%, accounting for 41.51% of the company's total operating revenue, which has gradually become a new driving force for the company's growth. The company also released the first quarterly report of 2022. 22q1 achieved a revenue of 429 million yuan, a year-on-year increase of 13.09%; The net profit attributable to the parent company was 176 million yuan, a year-on-year increase of 2.69%.
The gross profit margin of modules and other products increased significantly, and the non tantalum business expanded smoothly: in 2021, the overall gross profit margin of the company was 68.73%, a year-on-year decrease of 0.42pct, of which the gross profit margin of component business decreased by 1.61pct, or due to changes in product delivery structure and price fluctuations of civil products; The gross profit margin of module and other product businesses increased by 5.12pct, reflecting the improvement of the company's overall profitability and the smooth expansion of businesses other than tantalum capacitors. 22q1's overall gross profit margin was 70.75%, an increase of 0.52pct year-on-year.
Raising investment projects to improve the production capacity of non tantalum business and promote the horizontal layout of products: the company issued the draft of fixed increase registration in September 2021, raising a total of 1 billion yuan for the construction of microwave electronic components production base, R & D center and supplementary working capital. After the completion of the microwave electronic components production base construction project, the company is expected to add 2 billion ceramic capacitors per year, 1.5 million circulators and isolators per year, with an annual increase of 506 million yuan in operating revenue. The company caters to the needs of intelligent manufacturing and domestic substitution, seizes the development opportunities of new energy vehicles, 5g communication and other industries, horizontally expands non tantalum business and cultivates new profit growth points.
Downstream demand continued to grow and operating cash flow improved significantly: by the end of the first quarter of 22, the company's accounts receivable increased by 24.89% compared with the end of the previous year, mainly due to the growth of the company's revenue and the simultaneous increase of accounts receivable. Prepayments increased by 66.25% compared with the end of the previous year, mainly because the company purchased from suppliers in advance for subsequent production. The inventory increased by 15.45% compared with the end of the previous year, mainly due to the growth of the company's business scale and the increase of raw material preparation and inventory goods. The company's net cash flow due from sales of products increased by 105% year-on-year in 2021, mainly due to the increase in the company's net cash flow from sales of products.
Profit forecast, valuation and rating: considering the uncertainty of the expansion speed of the company's module products and other businesses in new fields, we lowered the company's profit forecast of 7.24% / 14.06% to RMB 1.008/1.241 billion in 202223, and predicted a profit of RMB 1.468 billion in 2024, with EPS of RMB 2.45/3.01/3.56 in 20222024. The current share price corresponds to PE of 22 / 18 / 15x respectively. In 2021, the company achieved good expansion in non tantalum capacitor business such as ceramic capacitors and module products, and the profitability is expected to continue to improve in the future. Maintain the "buy" rating of the company in combination with the current valuation level.
Risk warning: the risk that the sales volume of highly reliable products is less than expected; Risk of decline in gross profit margin of highly reliable products; After the foreign epidemic is gradually controlled, the competitor's production capacity recovery leads to the risk of falling civil product prices and gross profit margin; The risk that the market expansion progress of new products is less than expected.
