\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 26 Zhuzhou Hongda Electronics Corp.Ltd(300726) )
Event: the company released its annual report for 2021, achieving a revenue of 2 billion yuan, 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%. In 2022q1, the revenue was 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%.
Steady operation and steady increase in performance. Benefiting from the large amount of downstream demand and the expansion of the company in the field of feitan capacitor products and civil products, the company’s operating revenue in 2021 was 2 billion yuan (YoY + 42.8%), and the net profit attributable to the parent company was 816 million yuan (YoY + 68.7%). The increase in income and profit is mainly due to the sharp decline in the expense rate during the period (19.8%, -6.43pct), while the comprehensive gross profit margin is 68.7%, only a slight decrease of 0.4pct year-on-year.
1) quarterly, the company’s 2021q4 revenue is 465 million yuan (YoY + 0.35%, qoq-24.0%), and the net profit attributable to the parent company is 177 million yuan (YoY + 20.4%, qoq-25.9%). In 2022q1, the revenue was 429 million yuan (YoY + 13.1%), and the net profit attributable to the parent company was 176 million yuan (YoY + 2.7%), down 7.8% and 1.1% respectively month on month. Affected by the payment collection rhythm of downstream customers, the quarterly performance may fluctuate. At present, the prosperity of the industry is still at a high level. The company actively increases production capacity and expands product categories. It is highly reliable and driven by two wheels in the civil product market. The development can be expected during the 14th Five Year Plan period.
2) in terms of products, in 2021, the company’s Tantalum Capacitors continued to maintain the dominant position in the industry and achieved growth, with a year-on-year increase of 36.47%. Among them, the revenue of high-energy mixed tantalum products was close to 600 million yuan, reaching a new high. After several years of market development and technology accumulation, the revenue of non tantalum capacitor products was 830 million yuan, a year-on-year increase of 52.77%, accounting for 41.51% of the total revenue, which gradually became a new driving force for the growth of the company. In addition, benefiting from the accelerated localization of electronic products, the demand for civil electronic components has increased significantly, and the company’s civil products business has increased significantly.
During this period, the cost was reasonably optimized and the R & D investment increased steadily. The company’s expense rate during the period was 19.8%, a year-on-year decrease of 6.43 PCT, of which the management expense rate and sales expense rate decreased by 2.71 PCT and 4.21 PCT respectively, and the corporate governance was gradually optimized. The R & D expense ratio increased slightly by 0.37pct year-on-year, and the R & D expense increased by 51.9% year-on-year. The main investment includes improving the quality level of the company’s existing products, such as high-reliability and high-energy tantalum hybrid capacitors, and expanding new models such as high-capacity norflash and radiation resistant MOSFET, so as to ensure the company’s leading position in technology and sustainable development of operation.
High inventory shows the company’s confidence in downstream demand, good cash flow and improved operation quality. At the end of the 21st century, the company’s inventory was 829 million, an increase of 44.6% compared with the beginning of the period and 7.1% month on month. Among them, raw materials and products in process increased by 58.5% and 28.0% respectively compared with the beginning of the period, which indicates that the company’s stock for future orders will increase; 296 million yuan of goods issued, that is, the part of the company’s delivered customers that has not yet recognized revenue, is expected to continue to increase the company’s performance in the short and medium term. The inventory of 2022q1 is 947 million, an increase of 15.4% over the high base at the end of the year, and the rapid growth in the future can be expected. The operating cash flow was 526 million yuan, with a significant year-on-year increase of 104.8%, and the operating quality continued to improve.
Large government subsidies are determined and will be gradually transferred to the income statement in the future. In 2021, the company’s deferred income was 272 million yuan, an increase of 40.0% over the beginning of the period, mainly from government subsidies, of which 72 million yuan of government subsidies related to income will be included in profit and loss or offset related costs, and 100 million yuan of government subsidies related to assets and income will be included in profit and loss in the future.
The company’s fund-raising and investment projects are carried out smoothly, and the downstream demand expansion will be effectively supported. In 2021, the company raised about 1 billion yuan to invest in the construction of microwave electronic components production base and R & D center. By the end of 2021, the company had invested 199 million yuan of self raised funds in advance to carry out the construction of the project. The project was carried out in an orderly manner. After completion, it is expected to further improve the company’s market share.
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 1.086 billion yuan, 1.368 billion yuan and 1.708 billion yuan respectively, and the EPS will be 2.64 yuan, 3.32 yuan and 4.15 yuan respectively. The corresponding PE of the current stock price is 20x, 16x and 13X, maintaining the “recommended” rating.
Risk tip: the volume of military products in the 14th five year plan was lower than expected, and the capacity expansion was lower than expected.
