\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 82 Suwen Electric Energy Technology Co.Ltd(300982) )
The profit in 2021 is in line with expectations, and the power equipment is expanding rapidly. In 2021, the company achieved a revenue of 1.86 billion yuan, an increase of 36% at the same time; The net profit attributable to the parent company reached 300 million yuan, an increase of 27% at the same time, which is in line with the expectation. Among them, the share based payment fee for equity incentive was about 13 million yuan during the year. If this factor is excluded, the net profit attributable to the parent company will increase by about 32%. The net profit attributable to the parent company after deducting non profits was 280 million yuan, an increase of 31% at the same time, and the operating performance continued to maintain rapid growth. Quarter by quarter, Q1-Q4 achieved revenue of RMB 3.3/3.9/4.7/660 million respectively, with an increase of 86% / 14% / 22% / 44%, and Q4 revenue increased significantly; The net profit attributable to the parent company was RMB 0.6/0.7/0.8/100 million respectively, with a same increase of 130% / 27% / 10% / 10%. In terms of segments, the revenue of electric power construction and intelligent power service (EPCO) / electric power consulting and design / power equipment supply was 1.38/1.4/330 billion yuan respectively, with a year-on-year change of 36% / – 1% / 60%. The core business of distribution network EPCO expanded steadily. Among them, we expect the revenue of intelligent power service to be 80-90 million yuan, with a year-on-year increase of about 40%; The power equipment supply business continues to grow rapidly and has become the focus of the company’s business, and the quality of customers is high. The main customers include Byd Company Limited(002594) , AVIC lithium battery, Xingyu lamp, ideal automobile, etc. In terms of sub regions, the revenue of Jiangsu Province / outside Jiangsu Province is 1.73/130 billion yuan respectively, with a year-on-year change of 41% / – 13%. The share of Jiangsu continues to increase. In the follow-up, with the completion of the company’s Shanghai base, the business outside Jiangsu Province is expected to accelerate the development. The company plans to pay 6 yuan in 10, with a total cash dividend of 84.19 million yuan, accounting for 28% of the net profit attributable to the parent company.
The gross profit margin decreased, the expense rate was stable, and the cash inflow narrowed. In 2021, the gross profit margin of the company was 28.6%, yoy-1.2 PCT, and the gross profit margin decreased. It is expected that on the one hand, it is affected by the rise of raw material prices, on the other hand, it is due to the rapid expansion of the business scale of power equipment with slightly lower gross profit margin, which reduces the overall gross profit margin of the company. During the period, the expense rate was 9.3%, yoy-0.1 PCT, of which the sales / management / R & D / financial expense rate was yoy-0.13 / + 0.08 / + 0.01 / – 0.05 PCT, the expense rates remained basically stable, and the management expense rate increased, mainly due to the high share based payment expenses. The impairment loss of assets increased by about 10 million yuan year-on-year. The income tax rate was 14.1%, basically unchanged year-on-year. The net interest rate attributable to the parent company is 16.2%, yoy-1.1 PCT. The net cash inflow from operating activities was 50 million yuan, about 210 million yuan lower than that in the same period last year, which was mainly due to the significant increase of project funds, materials and equipment funds and deposit paid by the company compared with the previous period, and the corresponding funds were not recovered in the reporting period. This year, the company will focus on cash flow management as one of the key tasks, and continue to optimize the collection mode by adopting the node method. It is expected that the subsequent cash flow is expected to be significantly improved. The cash to cash ratio and cash to pay ratio are 71% and 72% respectively, and yoy-20 / – 2 PCTs. The inventory turnover rate / accounts receivable turnover rate were 21.1 / 2.3 times, yoy + 10.3 / – 0.2 times, and the inventory turnover rate increased significantly.
Increase the manufacturing of power equipment with fixed code to strengthen the driving force of medium and long-term growth. At present, the company’s equipment is mainly high-voltage and low-voltage complete sets of equipment, and the circuit breakers and other components required for equipment production are mainly obtained through outsourcing. In order to reduce production costs, enhance the profitability of the industrial chain and improve the reliability and stability of supply, the company continues to increase the power equipment business. At the end of last year, the company established a joint venture with Jiangsu Luokai Mechanical & Electrical Co.Ltd (603829) to lay out the field of distribution switch control equipment. Recently, the company plans to increase 1.4 billion yuan and focus on the construction of equipment production base (at the same time, set up equipment and energy storage technology R & D center) to increase equipment manufacturing again. The construction period of the equipment production base invested by raising funds is 3 years, and the estimated revenue is 1.48 billion yuan / year (4.5 times the revenue of the company’s power equipment supply business in 2021), and the IRR is 17.6%, including the static payback period of 6.6 years during the construction period. The production base is expected to significantly improve the company’s power equipment supply business capacity, strengthen the scale and cost advantage of EPCO business, and have sufficient power for medium and long-term profit growth.
Investment suggestion: we predict that the company’s net profit attributable to the parent company from 2022 to 2024 will be 4.0 / 5.3 / 700 million yuan respectively, with an increase of 33% / 32% / 32%, EPS will be 2.86/3.78/4.99 yuan respectively, CAGR will be 32% from 2021 to 2024, and the corresponding PE of the current stock price will be 14 / 11 / 8 times; Based on the latest 20% discount of the stock price, the EPS after fixed increase is 2.19/2.89/3.81 yuan respectively, corresponding to 18 / 14 / 11 times of PE, maintaining the “buy” rating.
Risk tips: the competition in the power industry intensifies the risk, the business development is less than the expected risk, the construction progress of fixed increase and raised investment projects is less than the expected risk, the risk of core brain drain, etc.
