\u3000\u3 Guocheng Mining Co.Ltd(000688) 696 Chengdu Xgimi Technology Co.Ltd(688696) )
Key investment points
Performance summary: in 2021, the company achieved a revenue of 4.04 billion yuan, a year-on-year increase of 42.8%; The net profit attributable to the parent company was 79.9 billion yuan, a year-on-year increase of 8.9%; Deduct non net profit of 430 million yuan, with a year-on-year increase of 73.4%. In a single quarter, Q4 company achieved a revenue of 1.39 billion yuan, a year-on-year increase of 45%; The net profit attributable to the parent company was 180 million yuan, a year-on-year increase of 88.5%. The company plans to pay a cash dividend of 30 yuan for every 10 shares, with a dividend rate of 31%.
China’s demand is strong, and the company’s market share has increased steadily. Under the trend of consumption upgrading, the scale of the projector industry has grown rapidly. According to IDC data, the shipment of projectors in China reached 4.7 million units in 2021, with a year-on-year increase of 12.6%, including 3.59 million consumer projection units, with a year-on-year increase of 19.5%, accounting for 74%, and the industry demand is strong. As an industry leader, the company continued to increase R & D investment. During the reporting period, the R & D expense rate increased by 1.6pp, promoting the accelerated iteration of the company’s products. During the reporting period, the company launched rspro2, h3s and other products, helping the company’s products to cover the top five shipments in China’s projection market, exceeding the sum of the second to fourth places, and promoting the market share to increase by 3.1pp to 21.2%. In terms of channels, the company has established a Wuxi Online Offline Communication Information Technology Co.Ltd(300959) coordinated marketing network, with tmall, jd.com and other major e-commerce platforms as the main online platforms. During the reporting period, the company cooperated with tmall to boost product sales on a daily basis, and the overall effect was remarkable; Offline stores expanded rapidly. By the end of the reporting period, the number of stores of the company’s Direct stores and franchise stores had reached 172.
In the overseas blue ocean market, the product matrix has been gradually improved. The projector in overseas market is still mainly based on LCD single chip microcomputer with lower price. In contrast, the intelligent micro projector mainly based on DLP path has better performance and more intelligence, and has huge space in overseas market. In recent years, the company has actively arranged overseas markets. During the reporting period, the company actively launched new products such as horizon and elfin overseas, supplemented the product matrix, continued to expand overseas channels, helped the company’s products to be fully rolled out in Europe, Japan and the United States, and promoted the company’s overseas revenue of 430 million yuan, a year-on-year increase of 145.2%, accounting for 10.7% of the revenue. We believe that 2021 is the first year for the company’s independent brand to expand in the overseas market. With the continuous enrichment of product matrix and the continuous expansion of channels, the company is expected to maintain a high growth rate in the overseas market.
Profitability improved significantly. During the reporting period, the company’s comprehensive gross profit margin was 35.9%, with a year-on-year increase of 4.3pp. Under the background of rising prices of raw materials, the company adopted (1) the gradual introduction of self polishing machines; (2) The proportion of high-end products was increased, and the product structure was optimized to realize the increase instead of decrease of gross profit margin. In terms of expense rate, the company strengthened product publicity and brand promotion, and promoted the sales expense rate to increase by 1.5pp to 15.4%; The management expense ratio was 9.1%, with a year-on-year increase of 1.8pp; The financial expense ratio was – 0.1%, with a year-on-year decrease of 0.2pp. Overall, the company’s net interest rate was 12%, up 2.5pp year-on-year. According to the data of a single quarter, the gross profit margin of Q4 was 33.4%, an increase of 0.4pp year-on-year; The net interest rate was 13.1%, up 3PP year-on-year.
The shortage of chip supply may be gradually alleviated, which helps the company sell in large quantities. During the reporting period, the global chip supply was tight, and the main chip DMD of DLP projector supplied by Ti was also tight. Affected by the shortage of chips, the company’s price strategy is constrained, and the discount is small at nodes such as double 11. We expect that the shortage of DMD chips is expected to gradually ease this year, and the company may adopt a more flexible price strategy to help the company’s product sales.
Profit forecast and investment suggestions. As a leading projector company, the company has strong comprehensive competitive strength of products and is expected to fully benefit from the improvement of intelligent projection penetration rate. It is expected that the EPS of 20222024 will be 13.45/18.12/24.03 yuan respectively, maintaining the “buy” rating.
Risk warning: the price of raw materials may fluctuate sharply and the terminal sales may be less than expected.
