\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 26 Zhuzhou Hongda Electronics Corp.Ltd(300726) )
Key investment points
Event: on April 21, 2022, the company released the annual report of 2021. In 2021, the company realized an operating revenue of 2 billion yuan (+ 42.79%); The net profit attributable to the parent company was 816 million yuan (+ 68.68%); Deduct 732 million yuan (+ 68.59%) of net profit not attributable to parent company.
The company’s performance in 2021 was slightly lower than expected, and the component business increased steadily. In 2021, the company achieved 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%. Quarterly, the company achieved revenue of 379 million yuan (+ 162.29%), 543 million yuan (+ 44.84%), 612 million yuan (+ 46.69%) and 465 million yuan (+ 0.35%) in Q1, Q2, Q3 and Q4 in 2021; 2) In terms of products, the revenue of components is 1.716 billion yuan (+ 45.22%), modules and other products is 284 million yuan (+ 29.74%), of which the revenue of tantalum capacitor is 1.170 billion yuan (+ 36.47%), and the revenue of non tantalum capacitor products is 830 million yuan (+ 52.77%).
Business expansion and project construction have been carried out steadily, management and marketing advantages have been continuously enabled, and profitability has been improved. In terms of gross profit margin, the overall gross profit margin of the company in 2021 was 68.73%, a year-on-year decrease of 0.42pct, mainly due to the increase of direct material costs and manufacturing expenses. Among them, the cost of direct materials increased by 40.28% year-on-year, due to the growth of sales revenue; The manufacturing expenses increased by 59.47% year-on-year, which was caused by the depreciation of purchased machinery and equipment and new plants transferred into fixed assets after completion acceptance, and the increase of fuel, power and outsourcing inspection and test fees. In 2021, the fixed assets were 346 million yuan, an increase of 61.91% year-on-year, of which the amount of new important construction in progress transferred into fixed assets was 61 million yuan. In terms of net interest rate, the net interest rate of the company in 2021 was 40.80%, an increase of 6.27pct over last year; The expense rate during the period was 19.79%, with a year-on-year decrease of 6.42pct. On the one hand, the company has established a relatively perfect sales network system, and marketing advantages have helped improve the rate. The sales expense rate in 2021 was 8.58%, a year-on-year decrease of 4.20pct. On the other hand, the company improved management efficiency by standardizing and optimizing business processes. In 2021, the management expense rate was 5.03%, a year-on-year decrease of 2.71 PCT.
The company’s R & D work was carried out in an orderly manner, with new achievements to consolidate its core competitive advantage. In 2021, the company invested 125 million yuan in R & D, accounting for 6.23% of the total revenue, with a year-on-year increase of 0.24 PCT. The investment is mainly used for product quality improvement and product model category expansion. In 2021, the company carried out 33 scientific research projects, including 31 government and cooperation projects and 2 self raised projects. Among them, new projects such as 6V compact inductor integrated synchronous rectification and step-down chip, MOS integrated overvoltage and overcurrent protection chip and high reliability inductor integrated synchronous rectification and step-down circuit have passed the appraisal of the third party; The polymer aluminum capacitor encapsulated in metal shell is introduced, and the ultra-thin large-scale solid-state aluminum capacitor is expanded to 75v15000uf; Polymer chip tantalum capacitors have launched new products above 100V. As of December 2021, the company has obtained a total of 231 patents, including 37 invention patents, 182 utility model patents, 12 appearance patents, 38 computer software works and 3 integrated circuit layout designs.
Orders have increased steadily, and capacity expansion will contribute to future performance growth. In 2021, the company’s accounts receivable increased by 21.45% year-on-year and notes receivable increased by 30.32% year-on-year, indicating that orders increased and sales increased; The production and marketing rate increased from 91.05% to 95.13%, reflecting the increasing market demand. Meanwhile, the company’s contract liabilities in 2021 were 405279 million yuan, an increase of 3.82% year-on-year, indicating stable order demand in the future. In order to meet the growing demand of downstream industries, the company will invest the raised funds in the capacity construction of microwave electronic components projects through fixed increase in 2021. At that time, the capacity of many products, including ceramic capacitors, circulators and isolators, will be increased. In addition, the important project under construction “new electronic component capacity expansion (phase I) finishing workshop and auxiliary room project” has been completed, which will help to further improve the current situation of capacity saturation and enhance the profitability and comprehensive competitiveness of the company.
The company’s platform strategy is progressing smoothly, and the performance of its subsidiaries is gradually and significantly realized. The company is based on solving the problem of localization and substitution of relevant products. All products are the first or leading technology in China, and constantly develop non tantalum capacitor business. After several years of development and technology accumulation, the market has gradually opened, and the sales volume of non tantalum capacitor products has increased rapidly. In 2021, the revenue of non tantalum capacitors was 830 million yuan (+ 52.77%), accounting for 41.51% of the total revenue, which has gradually become a new driving force for the growth of the company. At the same time, with the continuous expansion of the market, the sales volume of some subsidiaries increased significantly. Among them, the performance of Hongwei electronics, Hongda Hengxin, Hongda magnetoelectricity, Hongda Diantong and Hunan Guantao increased significantly, and the revenue increased by 112.72%, 111.75%, 81.23%, 46.02% and 42.19% respectively.
Profit forecast and investment suggestions: the company’s revenue and performance in 2021 are slightly lower than expected. According to the judgment before the downgrade, the company’s net profit attributable to the parent company from 2022 to 2024 is expected to be 1.151 billion yuan, 1.566 billion yuan and 2.091 billion yuan, corresponding to pe19, 14 and 10 times, maintaining the “buy” rating.
Risk tip: the competition in military electronics industry intensifies, the demand for tantalum capacitors is less than expected, and the expansion of non tantalum business is less than expected.
