\u3000\u3 Shengda Resources Co.Ltd(000603) 416 Wuxi Xinje Electric Co.Ltd(603416) )
Events
The company released the 2021 annual report and the first quarter financial report: the company achieved a revenue of 1.3 billion yuan in 2021, a year-on-year increase of + 14.5%; The year-on-year net profit attributable to the parent company was -4.6 billion yuan and -3.6 billion yuan; The comprehensive gross profit margin is 40.4%; In the first quarter of 2020, the revenue was 321 million yuan, a year-on-year increase of + 4.23%; The net profit attributable to the parent company was 75 million yuan, a year-on-year increase of – 15.6%; The comprehensive gross profit margin reached 39.8%.
PLC pull overall solution
The company’s PLC brand has obvious advantages. In 2021, the gross profit margin of PLC products reached 57.5%, maintaining a high level; The sales revenue reached 516 million yuan, a year-on-year increase of + 5.17%. The growth rate was flat, mainly driven by the demand for anti epidemic materials, resulting in a high base in 2020. The cgra of PLC products from 2019 to 2021 was 32%; On the other hand, the company made full use of the advantages of PLC brand to pull the driving business to achieve a breakthrough. The driving products have become the largest business of the company, with a revenue of 531 million yuan, a year-on-year increase of + 24.9%, and a cgra of 65% from 2019 to 2021; The upgrading of drive product series is accelerated, and the company’s six in one multi axis drive EtherCAT bus servo ds5c-m series is listed to provide better solutions for multi axis equipment; Bus type servo supports mainstream protocols such as PROFINET and EtherCAT; The new ms6-b3 series servo motor realizes comprehensive product improvement.
The rise of raw materials dragged down the gross profit, and the price increase showed brand confidence
The company’s comprehensive gross profit margin in 2021 was 40.4%, with a year-on-year rate of -3.43pct, of which the direct material cost in the operating cost was + 18.3% year-on-year; Manufacturing expenses + 74.8% year-on-year, and direct labor + 25.3% year-on-year; During this period, the growth rate of expenses was higher than that of revenue, the sales expenses were + 59.6% year-on-year, and the investment in marketing network construction increased; Administrative expenses increased by 42.7% year-on-year, mainly due to the expansion of personnel and the increase of employee compensation; R & D expenses + 40.0% year-on-year, due to the increase in R & D investment. Affected by the rise of raw materials such as upstream chips, magnetic steel and copper, the gross profit margin of driving products fell to 29.2% from 32.3% last year. The company will raise the price of some driving products by 50-80 yuan on May 1, 2022, and actively raise the price to show brand confidence.
Steady growth measures are expected to accelerate, and the manufacturing boom may hit the bottom and reverse
In 2021, the scale of China’s industrial automation market reached 253 billion yuan, with a year-on-year increase of 22.0%, maintaining a rapid growth momentum. Among them, general motion control increased the fastest year-on-year, with an increase of 40% and PLC increased by 25%. Since the second half of 2021, the outlook of China’s manufacturing industry has fluctuated significantly due to the recovery of overseas manufacturing capacity and the weakening of China’s exports and sluggish consumption. Under the background of repeated steady growth pressure of China’s epidemic in the short term, monetary and fiscal policies are expected to speed up, and the manufacturing industry may hit the bottom and reverse. In the medium and long term, China’s industrial economic structure is undergoing rapid adjustment and upgrading, the demand for industrial automation in emerging industries is rapidly releasing, the demand for “machines replacing people” in traditional industries still has potential, and the industrial automation industry is in the process of spiral growth.
Profit forecast
It is estimated that the company’s revenue from 2022 to 2024 will be 1.5 billion yuan, 1.92 billion yuan and 2.41 billion yuan respectively; The net profit attributable to the parent company is RMB 353 million, RMB 496 million and RMB 637 million respectively, and the corresponding dynamic PE of the current stock price is 11, 8 and 6 times respectively. Maintain a “recommended” rating.
Risk tips
The risk of market demand decline caused by macroeconomic fluctuations; The risk of intensified market competition and declining profitability; Management risks caused by the expansion of the company’s scale, etc.
