\u3000\u3 Jiangsu Eastern Shenghong Co.Ltd(000301) 029 Dongguan Yiheda Automation Co.Ltd(301029) )
Event: on April 26, the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved a revenue of 1.803 billion yuan, a year-on-year increase of 49.03%; The net profit attributable to the parent company was 401 million yuan, a year-on-year increase of 47.65%; The net profit attributable to the parent company after non deduction was 393 million yuan, a year-on-year increase of 51.01%. The company plans to increase 2 shares for every 10 shares and distribute a cash dividend of 3 yuan. In the first quarter of 2022, the company achieved a revenue of 487 million yuan, a year-on-year increase of 52.60%; The net profit attributable to the parent company was 101 million yuan, a year-on-year increase of 63.72%.
The company’s operating performance maintained high growth in 2021 and exceeded expectations in the first quarter of 2022.
(1) in 2021, the company’s revenue increased by 49.03% year-on-year, the net profit attributable to the parent increased by 47.65% year-on-year, and the net profit attributable to the parent increased by 51.01% year-on-year after deduction. In the first quarter of 2022, the company’s revenue increased by 52.60% year-on-year, and the net profit attributable to the parent company increased by 63.72% year-on-year; The first quarter performance exceeded expectations. Benefiting from the continuous strong demand of the automation equipment market, the continuous expansion of the company’s product categories and the gradual development of the market, the company’s operating performance maintained rapid growth.
(2) in 2021, the company’s gross profit margin was 41.57%, a year-on-year decrease of 2.28 percentage points; The net interest rate was 22.22%, a year-on-year decrease of 0.21 percentage points; The weighted average return on net assets was 22.66%, an increase of 0.59 percentage points year-on-year; The sales expense rate / management expense rate / R & D expense rate / financial expense rate were 4.89% / 6.57% / 3.67% / – 0.37% respectively, with a year-on-year increase of -2.37/0.05 / – 0.43 / – 0.09 percentage points respectively. In 2021, the gross profit margin and net profit margin of the company decreased, the expense rate during the period was continuously optimized, and the cost control ability was outstanding. In the first quarter of 2022, the company’s gross profit margin was 39.71%, a year-on-year decrease of 3.29 percentage points; The net interest rate was 20.72%, a year-on-year increase of 1.41 percentage points.
(3) in 2021, the company’s accounts receivable turnover days were 61.06 days, an increase of 0.36 days year-on-year; The inventory turnover days were 107.42 days, a year-on-year decrease of 6.21 days. In 2021, the company’s net cash flow from operating activities was 233 million yuan, a year-on-year decrease of 5.39%. The company’s net cash flow from operating activities remained at a high level, and its operating quality remained stable.
Automation parts “industrial supermarket”, the company’s competitive advantage is prominent.
(1) the number of SKUs continues to increase, and the one-stop supply capacity is outstanding. By the end of 2021, the company has successfully developed FA factory automation parts product system covering 197 categories, 2066 sub categories and more than 1.1 million SKUs (the number of SKUs has increased by more than 200000 compared with the end of 2020), providing customers with rich one-stop product procurement service experience. In this process, the company gradually outputs the product standard system to customers and suppliers and shares the ability of supply chain management, so as to change customers’ design and procurement habits and enhance customers’ stickiness.
(2) the number of customers has been increasing, and new energy, 3C and other businesses have maintained high growth. The downstream of the company covers many automation and automation equipment industries such as new energy, 3C, automobile and photovoltaic, forming a high brand awareness and accumulating a good reputation. In 2021, the company’s revenue in the new energy / 3C / Automobile / photovoltaic / industrial Siasun Robot&Automation Co.Ltd(300024) industry was 4.65/4.63/187/96/081 million yuan respectively, with a year-on-year increase of 146.61% / 64.48% / 5.60% / 76.82% / 37.94% respectively. The company has strong demand in downstream industries, and its coverage in downstream industries continues to expand. In 2021, the number of transaction customers of the company exceeded 28000 (in 2020, the number of transaction customers of the company was 23300).
(3) the annual order processing volume and annual shipment volume are growing rapidly, and the advantages of supply chain management are obvious. The company has established a self-made supply system of agile manufacturing, a product supply system of OEM supply and intensive procurement. Through supplier development, quality control and warehouse sorting management, the company continues to strengthen the ability of supply chain management to ensure the timely, accurate and high-quality delivery of customer orders. In 2021, the company’s annual order processing volume was about 770000 orders, with a year-on-year increase of 38.18%; The total annual shipments were about 3.3 million, a year-on-year increase of 42.86%.
(4) information digitization and platform construction continued to improve. The company continues to increase investment in product digitization and transaction mode digitization, better cover and quickly meet the long tail demand with broad market capacity and improve the service efficiency of small and micro orders. Through the collection, processing and analysis of key data, ensure the information management of the whole link from order, production, procurement to delivery, improve the order response speed and shorten the delivery cycle. In 2021, the proportion of the company’s online customers increased from 60% in 2020 to 78%; The proportion of online customer sales increased from 17% in 2020 to 28%.
Maintain the “overweight” rating. The company is a leading one-stop supply enterprise of automation parts for FA factories in China. It has formed strong competitive advantages in the fields of standard setting, product development, supply chain management, platform operation, information and digital ability. The company meets customers’ one-stop procurement needs and can continuously provide customers with high-quality, low-cost and short delivery products. The company’s operating performance continues to grow rapidly. We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 611 million, 860 million and 1173 million respectively, corresponding to 33.40, 23.74 and 17.40 times of PE respectively. Maintain the “overweight” rating.
Risk tips: failure of model innovation, sharp decline in the demand of downstream industries, intensified market competition, less than expected promotion of raised investment projects, less than expected performance, etc.
