\u3000\u3 Guocheng Mining Co.Ltd(000688) 078 Beijing Longruan Technologies Inc(688078) )
The revenue and profit increased rapidly, and the net operating cash flow improved significantly. In the first quarter of 2022, the company achieved a revenue of 42.74 million yuan, a year-on-year increase of 70.77%; The net profit attributable to the parent company was 9.21 million yuan, a year-on-year increase of 216.82%, exceeding the upper limit of previous performance forecast. The company’s net operating cash flow inflow in the quarter was RMB 50.04 million, with a year-on-year increase of 123.61%, and the payment collection ability was significantly improved. The gross profit margin of the company in the first quarter was 55.32%, an increase of 3.35pct compared with the same period last year, which shows that the company has significantly improved the reusability of product modules and human efficiency.
Coal is still China’s main energy supply, and the release of new production capacity is expected to broaden the market space. Recently, Premier Li Keqiang presided over an executive meeting of the State Council to determine measures to ensure and increase energy supply, improve the guarantee capacity of energy for economic and social development, give full play to the role of coal as the main energy, and through nuclear capacity increase and new production, it is expected to add 300 million tons of capacity this year. According to our special report on coal mine intelligence released on March 29, the market space for coal mine intelligent transformation is about 11.9 billion yuan from 2022 to 2025, and the market space for new coal mine intelligent construction is about 12 billion yuan, with a total corresponding market scale of about 23.9 billion yuan. In the next 5-10 years, coal will still be the main source of energy supply in China. New coal mines will be superimposed on the digital upgrading of existing mines, and the prosperity of the industry will continue to be verified.
The company has abundant orders in hand and guaranteed the growth of annual revenue and profit. According to the previous 2021 annual report, the company added 391 million yuan of orders in the whole year, an increase of 141.36% over 2020. Sufficient order reserves laid a good foundation for the company’s business development in the whole year. We believe that the company has been deeply engaged in the coal industry for 20 years, has strong technical reserves and the ability of successful commercialization of R & D, superimposes the advantages of existing market share, and is expected to open a new growth space under the background of intelligent upgrading of coal mines. Due to the complex geological conditions in the coal industry, most of them are underground operations. The development of coal GIS system needs a large amount of gray space data accumulation and strong modeling ability in expression. Based on the technology of coal GIS system, the company continues to expand the existing product line under the wave of intellectualization, so as to build a complete intelligent system. Later, in other intelligent links, it is expected to continue the high market share in GIS links.
Risk warning: the promotion of intelligent mine policy is not as expected; Repeated outbreaks bring the risk of delivery delay; The fluctuation of upstream coal price brings systemic risks.
Investment suggestion: for the first time, give a “buy” rating. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 103 / 148 / 211 million yuan, with a year-on-year growth rate of 64% / 43% / 43%; Diluted EPS = 1.46/2.09/2.99 yuan, and the current share price corresponds to PE = 31 / 22 / 15x.
