\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 82 Suwen Electric Energy Technology Co.Ltd(300982) )
The company’s performance in 21 years is in line with expectations, and it is planned to further improve the company’s comprehensive strength through fixed growth. On April 24, the company released its annual report for 2021. In 2021, the company achieved an operating revenue of 1.856 billion yuan, a year-on-year increase of 35.58%; The net profit attributable to the parent company was 301 million yuan, a year-on-year increase of 26.82%; Net profit deducted from non parent company was 277 million yuan, with a year-on-year increase of 30.53%; The basic earnings per share was 2.34 yuan, a year-on-year increase of 3.54%. In addition, the company announced the plan to issue A-Shares to specific objects in 2022. It plans to issue shares to specific objects and plans to raise a total amount of no more than 1.390 billion yuan for the construction of intelligent electrical equipment production base and power electronic equipment and energy storage technology R & D center, so as to further enhance the comprehensive strength of the company.
The main business of EPCO is growing steadily. The company has taken the lead in laying out and forming a one-stop whole industry chain service capacity of power design services, power equipment, power construction and intelligent power services, and photovoltaic energy storage EPCO. In 21 years, the company’s revenue and net profit attributable to the parent company continued to grow rapidly. In terms of specific sectors, in 21 years, the company’s power construction, intelligent power service and power equipment supply business achieved revenue of 1.381 billion yuan and 330 million yuan respectively, with a year-on-year increase of 35.90% and 60.15% respectively. The proportion of revenue of the two core businesses rose to 92.19%, the core business maintained a high growth rate, and the power consulting and design business remained basically stable.
In the past 21 years, the profitability of the company’s main business has been stable, and the profitability is expected to be further improved in the future. Affected by the epidemic and the rise of commodity prices, the gross profit margin of 21 company decreased by 1.15pct to 28.62% year-on-year, and the gross profit margin of power construction, intelligent power service and power equipment supply business decreased slightly by 0.58pct, 0.50PCT to 28.12% and 22.01% year-on-year respectively. The profitability of its main business was stable. In the past 21 years, the company’s sales expense rate has increased due to the improvement of the salary of sales personnel and the accelerated development progress outside the province. The sales resources laid by the company in the early stage will contribute to the subsequent performance increment, and the sales expense rate in the later stage is expected to be diluted; The company’s management expenses have increased due to the amortization of 193339 million yuan in 21 years. After deducting the impact of equity incentive expenses, the company’s management expenses and management expense rate have declined in 21 years, and the effect of the company’s cost reduction and efficiency increase measures is obvious. In the future, the profitability of the company will be further improved with the increase of cost side control, the dilution of period expenses and the increase of the self supply proportion of circuit breakers in the raised investment projects of the fixed increase plan.
Accelerating the layout of markets outside the province will help improve the growth space of the company. The company has acquired the second-class qualification for undertaking installation and the second-class qualification for general contracting of power engineering construction, and its technical strength is in the relatively leading echelon among private enterprises. With the help of rich downstream cases accumulated in the past 14 years, the company has actively expanded outside Jiangsu Province. At present, it has expanded to more than 10 provinces such as Shanghai, Anhui, Zhejiang, Hunan, Inner Mongolia, Tianjin and Guangdong. In the past 21 years, the company’s business outside the province has achieved a revenue of 130 million yuan, accounting for 6.98% of the revenue. In the past 21 years, the number of new contracts signed outside the province has increased rapidly, and the construction of Shanghai base is also accelerating. The proportion of business outside the province is expected to further increase in the future.
Investment suggestion: the company’s revenue and net profit attributable to the parent company have achieved positive growth in 2021, and is expected to maintain steady growth from 2022 to 2024. We expect the company’s revenue from 2022 to 2024 to be RMB 2.421 billion, RMB 3.218 billion and RMB 4.321 billion respectively, with corresponding growth rates of 30.4%, 32.9% and 34.3% respectively; The net profit attributable to the parent company was 404 million yuan, 547 million yuan and 748 million yuan respectively, with the corresponding growth rates of 34.2%, 35.2% and 36.9% respectively. Taking the closing price on April 22 as the benchmark, the corresponding PE from 2022 to 2024 was 14x, 10x and 8x. Maintain a “recommended” rating.
Risk tips: the risk of epidemic spread exceeding expectations, the risk of commodity price rise exceeding expectations, etc.
