\u3000\u30 Shenzhen Fountain Corporation(000005) 19 North Industries Group Red Arrow Co.Ltd(000519) )
Performance review
4.25 the company announced that 1q22 had a revenue of 1.382 billion yuan, an increase of 1.15% and a net profit attributable to the parent of 282 million yuan, an increase of 191.03%, slightly exceeding the upper limit of the previous forecast range (240 ~ 280 million yuan).
Business analysis
1q22 profitability improved significantly year-on-year. 1q22 net profit margin increased by 20.37% (+ 13.29pct), mainly due to the increase of gross profit margin (+ 16.11pct), and the increase of net profit margin lower than gross profit margin was mainly due to the increase of total profit and income tax (+ 31.83 million yuan). The net cash flow from operating activities was – 559 million yuan, down 289.28% at the same time, mainly due to the decrease of sales receipts and the increase of purchase materials; The net cash flow from investment activities increased by 37.09% at the same time, mainly due to the decrease in the amount of construction of fixed assets and investment and financial management expenses; Fixed assets and construction in progress decreased by 17.21 million yuan and increased by 46.59 million yuan respectively compared with the end of the 21st century.
Superhard materials have benefited from the strong demand for cultivation drill, and the performance has continued to improve significantly since 2h20: it has made a breakthrough in the mass production technology of dakela cultivation drill, and the development of 2h20 cultivation drill business is bright. In the 21st year, the production of cultivation drill has been expanded, the volume and price have increased simultaneously + the tight supply of industrial drill and the price has increased. The revenue of cultivation drill business in the 21st year is 2.4 billion yuan, with an increase of 25.21%, the gross profit margin is 43.45% (+ 6pct), the net profit is 657 million yuan, with an increase of 60.2% and the net profit rate is 27.3% (+ 6pct). 1h20 / 2h20 / 1h21 / 2h21 revenue was 8.2/11.02/13.56/1.051 billion yuan, with a month on month decrease of 15.7% / increase of 34.3%; The net profit was 147 / 263 / 342 / 314 million yuan, an increase of 14.7% / 79% / an increase of 30.1% / a decrease of 8.2%. 1q22 is expected to continue to maintain beautiful growth.
Military business income has grown steadily in recent years and the loss has expanded in 21 years: the revenue of special equipment has increased at a compound double-digit rate in recent years, with a revenue of 4.388 billion yuan in 21 years, an increase of 15.05%, a loss of 69.2 million yuan and a net interest rate of – 1.54% (- 1.28pct). In recent years, the revenue of automobile and parts business has stabilized at 700800 million yuan, the loss has continued to narrow, and the loss has been turned into a profit of 2.43 million yuan in 21 years.
Investment advice
The production capacity continued to expand in 22 years (the annual output of 120000 carats of HTHP cultivated drilling production line was put into operation in January (160 presses), and was shortlisted as the industrial drilling + cultivated drilling project with a total investment of 1.15 billion yuan in Henan “982” project and a planned investment of 500 million yuan in 22 years) + the yield rate of cultivated drilling was improved, the structural price rise + the price rise of industrial drilling in short supply enhanced the performance elasticity, and the superhard material business is expected to continue to grow rapidly. The net profit forecast for 22-24 years is RMB 1.005/14.28/1.858 billion, an increase of 107.1% / 42.06% / 30.12%, corresponding to pe24 / 17 / 13 times for 22-24 years, maintaining the “buy” rating.
Risk tips
The price of cultivated diamond fell / the demand was lower than expected, the improvement of military industry / automobile business was lower than expected, and the sales restriction was lifted.
