\u3000\u30 Zhongyan Technology Co.Ltd(003001) 24 Shenzhen Inovance Technology Co.Ltd(300124) )
Matters:
The company released its annual report for 2021. During the reporting period, the company achieved an operating revenue of 17.943 billion yuan, a year-on-year increase of 55.87%; The net profit attributable to the shareholders of the listed company was 3.573 billion yuan, a year-on-year increase of 70.15%; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was 2.918 billion yuan, a year-on-year increase of 52.55%. The company plans to pay a cash dividend of 0.3 yuan per share (including tax) and does not convert the capital reserve into share capital. The company’s performance is in line with expectations.
The company released the quarterly report, with a year-on-year growth of 4.72 billion yuan and a year-on-year growth of 4.02%; The net profit attributable to the shareholders of the listed company was 717 million yuan, a year-on-year increase of 11.00%; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was 698 million yuan, with a year-on-year increase of 11.62%.
Ping An View:
Revenue has maintained rapid growth, and short-term costs and expenses are under pressure. In 2021, the company achieved an operating revenue of 17.943 billion yuan, a year-on-year increase of 55.87%; The profit attributable to the parent company was 3.573 billion yuan, a year-on-year increase of 70.15%; The net profit attributable to the parent company after non deduction was 2.918 billion yuan, a year-on-year increase of 52.55%. 1q22 achieved an operating revenue of 4.778 billion yuan, a year-on-year increase of 40.01%; The net profit attributable to the parent company was 717 million yuan, a year-on-year increase of 11.00%; The net profit attributable to the parent company after non deduction was 698 million yuan, a year-on-year increase of 11.62%. The revenue side of the company has maintained a relatively strong growth momentum. Although the current macroeconomic situation and epidemic situation have had a certain impact on the demand of China’s industrial control industry, the company has maintained a good growth momentum in its main businesses by tapping structural growth opportunities, improving the ability of technology and product solutions and ensuring delivery. 1q22 company’s net profit growth rate is lower than the revenue growth rate, mainly due to the change of revenue structure and the increase in the proportion of new energy vehicle business with low gross profit margin; The prices of raw materials such as bulk commodities and chips are at a high level; The increased investment in strategic businesses such as digitization and energy management has led to an increase in the cost rate. At present, leading industrial control enterprises including the company have raised the price of main products and transmitted some cost pressure to the downstream. Looking forward to the whole year, we expect the company’s revenue side to continue a good growth trend and the profit margin will gradually improve compared with the first quarter.
The main business development momentum is good, and the general automation business accelerates to replace foreign capital. In 2021, the company’s general automation / Elevator / new energy vehicle / industrial Siasun Robot&Automation Co.Ltd(300024) / rail transit business achieved revenue of 89.82/49.67/29.92/362526 million yuan respectively, with a year-on-year increase of 65% / 14% / 171% / 111% / 49% respectively. 1q21 general automation / Elevator / new energy vehicle / industry Siasun Robot&Automation Co.Ltd(300024) / rail transit business achieved revenue of RMB 24.67/11.80/9.25/1.05/71 million respectively, with a year-on-year increase of 28% / 28% / 167% / 54% / – 44% respectively. In the past 21 years, the company’s general automation business performed brilliantly and continued to increase its share. Among them, the market share of the company’s general servo business in China exceeded 16%, surpassing foreign capital for the first time and becoming the first in the market; The control business actively promoted the strategy of “strengthening the controller”, and PLC orders grew rapidly. In terms of new product research and development, the company launched pa9000cnc system, high-power wind power pitch drive, water spray control system and other new products. Looking forward to 22 years, the company’s general automation business will further promote the collaborative operation mode of four organizations: product line / industry line / regional line / SEU. We expect to maintain a good development trend of accelerating the substitution of foreign capital.
Increase investment in strategic businesses such as digitization and energy management, and strive to become an international chemical control enterprise. While the main business maintains rapid growth, the company is increasing investment in strategic businesses such as digitization and energy management, laying a good foundation for the company’s medium and long-term development. In terms of digital business, in the past 21 years, the company has focused on developing a new generation of industrial Internet platform and intelligent hardware, and established model points in textile, cable and other industries. In terms of energy management business, focusing on the company’s dual carbon strategy, the products of energy storage business cover 100kw-1.688mw power segment, and the service scenarios cover power generation side, grid side and load side; In terms of product development, the company is actively promoting the development of new products such as large-scale energy storage PCs and liquid cooling PCs, and the competitiveness of energy storage platform products and power products is continuously improving. Looking forward to the future, the company proposes 22 years as the “internationalization” year of the company. We expect that with the continuous investment and active promotion of many strategic businesses of the company, the company is moving towards becoming a leading industrial automation company in the world. Investment suggestion: the company is a leading enterprise in China’s industrial control industry and continues to realize import substitution in the field of general automation. At present, the company’s main businesses have maintained a good development trend, and is increasing investment in strategic businesses such as digitization, energy management and internationalization, laying a solid foundation for the company to gradually grow into an international leading industrial automation enterprise. Taking into account the high price of raw materials, the uncertainty of the impact of the epidemic and the company’s increased investment in strategic business, we lowered the forecast of parent net profit of the company on 22 / 23 to 4.115/5.102 billion yuan respectively (the previous value was 4.262/5.412 billion yuan respectively), and increased the forecast of parent net profit for 24 years to 6.428 billion yuan, corresponding to the closing price of PE on April 26 to 31.0/25.0/19.9 times respectively. Maintain a “strongly recommended” rating.
Risk tips: 1) if the demand of industrial control industry declines, it will have a great impact on the company’s general automation business; 2) If the price of raw materials rises sharply, it will have an adverse impact on the gross profit margin of the company’s general automation and new energy vehicle business; 3) If the impact of the epidemic in China and overseas intensifies, it will have a certain adverse impact on the company’s overall business.
