\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 37 Zhe Kuang Heavy Industry Co.Ltd(300837) )
Key investment points
Event: on April 24, the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved a revenue of 573 million yuan, a year-on-year increase of 23.86%; The net profit attributable to the parent company was 158 million yuan, a year-on-year increase of 30.10%; The net profit attributable to the parent company after non deduction was 151 million yuan, a year-on-year increase of 31.72%. The company plans to pay a cash dividend of 3 yuan for every 10 shares. In the first quarter of 2022, the company achieved a revenue of 166 million yuan, a year-on-year increase of 33.09%; The net profit attributable to the parent company was 465962 million yuan, a year-on-year increase of 27.73%. At the same time, the company issued an announcement on the plan to issue convertible bonds to unspecified objects, and the total amount of funds to be raised shall not exceed 320 million yuan.
The company's operating performance grew steadily and its profitability remained at a high level.
(1) in 2021, the company's revenue increased by 23.86% year-on-year, the net profit attributable to the parent increased by 30.10% year-on-year, and the net profit attributable to the parent increased by 31.72% year-on-year after deduction. In the first quarter of 2022, the company's revenue increased by 33.09% year-on-year, and the net profit attributable to the parent company increased by 27.73% year-on-year. Closely focusing on the crushing and screening technology, the company actively developed new equipment and technologies, broadened the application scenarios of equipment, and improved the product power and competitiveness of the company through continuous innovation. The operating performance of the company maintained rapid growth in 2021 and the first quarter of 2022.
(2) in 2021, the company's gross profit margin was 43.67%, an increase of 0.15 percentage points year-on-year; The net interest rate was 27.49%, a year-on-year increase of 1.32 percentage points; The weighted average return on net assets was 15.74%, a year-on-year decrease of 1.78 percentage points; The sales expense rate / management expense rate / R & D expense rate / financial expense rate were 5.21% / 4.76% / 3.10% / - 1.48% respectively, with a year-on-year increase of 0.40 / - 0.38 / - 0.08 / - 0.92 percentage points respectively. In 2021, against the background of the sharp rise in the price of raw materials, the gross profit margin and net profit margin of the company increased steadily, the expense rate was continuously optimized during the period, and the profitability of the company was gradually enhanced. In the first quarter of 2022, the company's gross profit margin was 42.52%, a year-on-year decrease of 1.32 percentage points; The net interest rate was 28.02%, a year-on-year decrease of 1.17 percentage points; In the first quarter, the gross profit margin and net profit margin remained at a high level.
(3) in 2021, the company's accounts receivable turnover days were 63.01 days, a year-on-year decrease of 4.59 days; The inventory turnover days were 368.25 days, an increase of 68 days year-on-year. In 2021, the company's net cash flow from operating activities was 153 million yuan, with a year-on-year increase of 15.87%. The company continues to accelerate the collection of funds, the cash flow is good, and the operation quality is relatively stable.
Focusing on crushing and screening technology, the company has gradually clarified the layout of four downstream application scenarios.
(1) gravel aggregate field: the company has rich experience in green mine construction and many complete production line cases of medium and large mines. The company's products are leading in the industry in terms of output, energy consumption, stability and green environmental protection, and have established a good reputation in the medium and high-end mining equipment market. Under the policy background of steady growth, the construction of "two new and one heavy" has been accelerated, and the state has moderately advanced infrastructure investment. China's demand for sand and gravel aggregate is expected to remain high; Industry supply side reform and green mine construction are expected to further drive the steady growth of the company's gravel aggregate crushing and screening equipment business.
(2) metal mine field: at present, the company's metal mine equipment is mainly used in the field of iron ore. The company's equipment can be directly applied to the crushing and processing of iron ore after modifying some parameters. China's huge reserves of iron and steel mineral resources and the development of a large number of low-grade ores require a large number of advanced crushing and screening equipment to improve the washing efficiency of the concentrator, which will promote the application of crushing and screening equipment in the field of iron ore.
(3) recycling and reuse of waste lead-acid batteries and new energy batteries: the downstream customers of the company's waste lead-acid battery recycling and reuse equipment cover Tianneng, Chaowei and other first-line manufacturers of lead-acid batteries in China. Recently, the company plans to issue convertible bonds to raise no more than 320 million yuan, of which 250 million yuan will be invested in the "construction project of waste new energy battery recycling equipment manufacturing demonstration base", with a total investment of 406 million yuan. After the completion of the project, the company will form an annual production capacity of 10 sets of waste new energy battery crushing and sorting equipment and 21000 tons of waste new energy batteries. The company's application scenarios in the field of resource recovery equipment continue to expand.
(4) construction waste recycling: in 2021, the company completed the R & D and trial operation of construction waste recycling equipment. Among the convertible bond fund-raising projects, 70 million are proposed to be invested in the "construction waste resource recycling equipment production base construction project (phase I)". In recent years, the state has successively issued the guiding opinions on the comprehensive utilization of bulk solid waste in the 14th Five Year Plan period, the work plan for the construction of "waste free city" during the 14th Five Year Plan period and other documents to guide the development of the industry; At present, the increment of China State Construction Engineering Corporation Limited(601668) waste reaches about 2 billion tons every year, accounting for more than 40% of the total amount of municipal solid waste. The resource utilization rate of China State Construction Engineering Corporation Limited(601668) waste is only about 5%, which is far lower than the utilization rate of more than 90% in developed countries such as South Korea, Japan and Germany. The resource treatment of construction waste is expected to enter a period of rapid development, which drives the strong demand for construction waste crushing and screening equipment.
Maintain the "overweight" rating. The company is a leading supplier of medium and high-end mining machinery equipment in China. While consolidating the market advantage of sand and gravel aggregate, the company actively expands the market in the field of metal mines and resource recovery. The performance layout is gradually clear, and the business performance is expected to maintain steady growth. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 210 million yuan, 279 million yuan and 361 million yuan respectively (the value before 2022 and 2023 is 231 million yuan and 296 million yuan), and the corresponding PE will be 16.12, 12.14 and 9.40 times respectively, maintaining the "overweight" rating.
Risk tips: capital construction and real estate investment are less than expected risks, market competition intensifies risks, customer development is less than expected risks, the promotion of raised investment projects is less than expected risks, performance is less than expected risks, etc.
