\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 50 Wuxi Lead Intelligent Equipment Co.Ltd(300450) )
Event: the company released its 2021 annual report and 2022 quarterly report. In 2021, the company achieved a revenue of 10.04 billion yuan, a year-on-year increase of + 71.3%; The net profit attributable to the parent company was 1.59 billion yuan, a year-on-year increase of + 106.5%. In 2022q1, the revenue was 2.93 billion yuan, a year-on-year increase of + 142.4%; The net profit attributable to the parent company was 350million yuan, a year-on-year increase of +72.5%.
Key investment points
In 2021, the performance deviated from the forecast upper limit, and the profit growth rate under the scale effect was higher than the revenue growth rate: in 2021, the company achieved a revenue of 10.04 billion yuan, a year-on-year increase of + 71.3%; The net profit attributable to the parent company was 1.59 billion yuan, a year-on-year increase of + 106.5%, which was higher than the upper limit of 1.45-1.65 billion yuan in the performance forecast. The profit of subsidiary Titan became positive. In 2021, subsidiary Titan achieved a revenue of 1.94 billion yuan (585 million yuan in 2020, a year-on-year increase of + 232%), a net profit of 170 million yuan (78 million yuan in 2020), and a net interest rate of about 9%. In 2022q1, the company achieved a revenue of 2.93 billion yuan, a year-on-year increase of + 142.4% and a month on month increase of – 28.4%; The net profit attributable to the parent company was 350 million yuan, up + 72.5% year-on-year and – 40.4% month on month.
The net profit margin increased significantly in 2021, and the increase in the proportion of logistics lines with low gross profit led to the decline of profitability in 2022q1: the gross profit margin of the company’s sales in 2021 was 34.1%, year-on-year -0.3pct; The net profit margin of sales was 15.8%, with a year-on-year increase of + 2.7pct, mainly benefiting from the decline of the period expense rate. In 2021, the period expense rate of the company was 16.9%, with a year-on-year decrease of -1.5pc. In Q4 single quarter, the gross profit margin of sales was 29.1%, with a year-on-year ratio of -0.2pct and a month on month ratio of -7.7pct; The net profit margin of sales was 14.2%, with a year-on-year increase of + 6.7pct and a month on month increase of -4.6pct. The decline in gross profit margin in 2021q4 is mainly due to the increase in the proportion of revenue recognized by logistics lines with low gross profit (about 15% gross profit margin), and the low gross profit margin of logistics lines is also due to the lack of phased production capacity and the adoption of outsourcing mode. In 2022q1, the gross profit margin of the company’s sales was 30.8%, with a year-on-year increase of -9.4pct; The net profit margin of sales was 11.8%, with a year-on-year increase of -4.8pct; The expense rate during the period was 16.5%, with a year-on-year increase of -6.4pct. In 2022q1, the proportion of logistics lines is still high, dragging down the overall gross profit margin. With the release of the company’s production capacity and the gradual recovery of outsourcing, we expect the gross profit margin of logistics lines to rise to about 30% of normal.
The scale of newly signed orders increased rapidly, and the early preparation of goods led to a negative operating net cash flow in 2022q1: by the end of 2021, the company’s contract liabilities were 3.86 billion yuan, a year-on-year increase of + 103%; The inventory was 7.78 billion yuan, with a year-on-year increase of + 171%. In 2021, the company signed new orders of 18.7 billion yuan (excluding tax), a year-on-year high of + 69%, ensuring a high increase in short-term performance. The company’s net operating cash flow in 2021 was 1.34 billion yuan, a year-on-year increase of – 0.7%, basically stable; The net operating cash flow in 2022q1 was – 1.21 billion yuan, a significant decline compared with 180 million yuan in the same period in 2021. We judge that it is mainly due to the large number of new orders signed by the company and the need to pay more money for goods preparation and production in the early stage. In the follow-up, with the increase of delivery scale, the cash flow of the company is expected to improve significantly.
Profit forecast and investment rating: as the downstream power battery plant enters the peak of production expansion, the company will significantly benefit as a leading equipment supplier. We maintain the net profit attributable to the parent company of the company from 2022 to 2024 at RMB 2.80/36.0/4.27 billion, corresponding to 25 / 19 / 16 times the current share price PE. Considering the firm leading position and performance flexibility of the company, we maintain the “buy” rating.
Risk tip: the sales volume of new energy vehicles is lower than expected, and the expansion of downstream power battery plants is lower than expected
