\u3000\u3 Guocheng Mining Co.Ltd(000688) 696 Chengdu Xgimi Technology Co.Ltd(688696) )
Events
The company disclosed the annual report of 2021. In the whole year, the company achieved a total revenue of 4.038 billion yuan / + 42.78%, a net profit attributable to the parent of 483 million yuan / + 79.87%, a deduction of 429 million yuan / + 73.37%, and a basic earnings per share of 10.09 yuan / + 40.73%.
Key investment points
The market share increased steadily, and the effect of “high-end + self research” revenue expansion and profit increase was obvious: on the revenue side, the company’s operating revenue in 2021 was 4.038 billion yuan, a year-on-year increase of 42.78%, which was roughly in line with previous expectations. According to IDC data, the company’s shipment volume continued to rank first in China’s projection equipment market in 2018, 2019, 2020 and the first half of 2021, with market shares of 13.2%, 14.6%, 18.1% and 20% respectively. On the profit side, the net profit attributable to the parent company and the net profit deducted from non attributable to the parent company were 483 million yuan and 429 million yuan respectively, achieving double-digit growth of + 79.87% and + 73.37% year-on-year. The overall gross profit margin of the company was 35.88% / + 4.25pct. The significant increase in profitability was due to the high-end transformation of product structure on the one hand, and the continuous introduction of self-developed optical machines led to the increase of gross profit margin and net profit on the other hand. On the product side, the intelligent micro investment machine is still the main component of revenue and gross profit. The annual sales volume in 2021 is 1089300 units / + 28.58% and 1078800 units / + 33.79% respectively. The production sales ratio is 99.04% / + 3.86pct, and the contribution to the company as a whole is 86.71% / + 0.61pct and 85.78% / – 1.93pct respectively.
Business is improving and R & D continues to increase: in terms of cash flow, the net cash flow of the company’s operating activities last year was 536 million yuan / year-on-year + 189.32%. The good cash flow is due to the expansion of the company’s revenue and profit scale, which helped to increase the corresponding sales collection. At the same time, the capital turnover capacity was enhanced, and the turnover days of accounts receivable and accounts payable were – 7.6 days and + 43.24 days year-on-year respectively. In terms of expenses, the sales expenses and management expenses in 2021 were 623 million yuan / + 75.79% and 106 million yuan / + 54.38% respectively. The company continued to scale up R & D and invested 263 million yuan / + 89.03%, increasing the proportion of R & D expenses in revenue from 4.92% in 2020 to 6.51%. During the reporting period, 69 authorized invention patents were newly obtained, and a total of 112 invention patents have been obtained. Based on the technical achievements in the fields of optics, machine vision, image intelligent algorithm and so on, the display brightness of the new h3s of H1 listed in China was improved, and the image intelligent obstacle avoidance Screen alignment and other functions further improve the ease of use of the equipment. The new rspro2 supports the zooming and correction of the picture without loss of image quality and brightness through the optical zoom lens; In addition, the R & D team was also expanded to 668 people / + 32.34%.
The overseas layout maintained a good growth trend, and the film and television business helped push up the niche ceiling: in terms of overseas business, the company’s overseas revenue was 434 million yuan, maintaining a three digit year-on-year growth of 145.22%, accounting for 10.75% / + 4.49pct of the total revenue. During the reporting period, the company’s products have entered regional markets such as Japan, Europe and the United States, and are publicized and sold online through third-party platforms such as Amazon and Lotte and its own global official website; Offline, local chain retail groups (home appliances, MediaMarkt, etc.) and regional distributors are connected to realize the full online and offline coverage of the company’s products in overseas markets. In terms of film and television business, in 2021, the company launched Jimi gmax4k, events, karaoke and other sectors to meet the multi-level needs of users for content. By the end of December 2021, the number of monthly live users of projection terminals had reached 2.11 million, and the expansion of business is expected to further push up the ceiling of the scale of intelligent micro investment market.
Investment suggestion: Chengdu Xgimi Technology Co.Ltd(688696) is the leader in the field of consumer intelligent micro investment in China. With excellent product design and user experience and strong marketing ability, it has made outstanding performance; Previously, the company’s “high-end + self research” and overseas strategy have achieved brilliant results, cashing in the deep strength of the company’s management and implementation to the performance. We predict that the company’s earnings per share from 2022 to 2024 will be 13.45, 18.44 and 23.67 yuan respectively, and the PE in the next three years will be 27.8 times, 20.2 times and 15.8 times respectively. We raise the rating and give the suggestion of “Buy-A”.
Risk tip: the market penetration rate of high-end products is not ideal; Deterioration of market competition environment; The results of developing new products are not as good as expected; Chip shortage intensifies; Overseas policy and market risks exceeded expectations.
