Huaqin Technology (688281)
Event description:
The company released the first quarter report of 2022. In 2022q1, the company achieved an operating revenue of 142 million yuan, a year-on-year increase of 203.54%; The net profit was 592936 million yuan, a year-on-year increase of 92.01%, and the basic earnings per share was 1.19 yuan.
Event comments:
The net profit of Q1 revenue increased rapidly in 22 years, benefiting from the mass production of batch products. The company is mainly engaged in the R & D, sales and production of special functional materials, including stealth materials, camouflage materials and protective materials. In 2022, Q1 company achieved an operating revenue of 142 million yuan, a year-on-year increase of 203.54%, and a net profit of 59 million yuan, a year-on-year increase of 92.01%. The rapid growth of revenue and net profit mainly came from the mass production of stealth materials and camouflage materials that have been finalized and batch produced. At present, the products finalized and batch produced by the company include 3 brands of stealth materials and 2 brands of camouflage materials. More than 50 brands are still in the stage of small batch trial production and pre research trial production, and the performance growth of the company is sustainable.
In 2012, 200 million new orders were signed in Q1, and the cooperative relationship between downstream customers was stable. The company's main customers are enterprises and institutions subordinate to China military industry group. From 2018 to 2020, the sales of A1 unit, the largest customer, accounted for 75.72%, 80.30% and 66.70% respectively. In March 2022, the company signed a new major contract of 200 million yuan with A1 unit, and the performance period is within one month from the date of receiving A1 customer parts. The amount of the order accounts for 39.06% of the operating revenue in 2021, bringing deterministic growth to the performance in 2022. From 2021 to now, the total amount of orders with more than 10 million yuan in the new orders signed by the company is nearly 1 billion yuan, the viscosity of downstream customers is high, and the company's orders are full.
IPO financing projects are carried out in an orderly manner, and the batch production and volume can be expected in the future. The company was listed on March 7, 2022. It plans to raise 1.48 billion yuan, but actually raised 3.158 billion yuan and raised nearly 1.7 billion yuan in excess. In 2022, the total net assets of Q1 company were 3.553 billion yuan and the net assets per share were 53.30 yuan, which were greatly improved, the asset structure of the company was optimized and the asset liability ratio was greatly reduced. At present, the company's fund-raising and investment projects are carried out in an orderly manner. The projects under construction in Q1 in 2022 were 1.9805 million yuan, with a year-on-year increase of 156389%, mainly due to the construction of the new material park. The net cash flow from operating activities was -714328 million yuan, a year-on-year decrease of 231.57%. On the one hand, it was due to the expansion of business scale and the increase in the payment for purchased raw materials. On the other hand, the acceptance and settlement of the company's downstream military scientific research and production enterprises were often concentrated in the second half of the year, and the sales collection decreased in the first quarter.
Profit forecast, valuation analysis and investment suggestions: the company is expected to achieve revenue of 725 million yuan, 965 million yuan and 1238 million yuan respectively from 2022 to 2024, with a year-on-year increase of 41.8%, 33.0% and 28.3%; The net profit attributable to the parent company was 285 million yuan, 407 million yuan and 518 million yuan respectively, with a year-on-year increase of 22.0%, 43.2% and 27.0%; The corresponding EPS is 4.27 yuan, 6.11 yuan and 7.76 yuan respectively. Based on the closing price of 253.33 yuan on April 25, the corresponding PE is 59.4x, 41.5x and 32.6x respectively, maintaining the "overweight" rating.
Risk warning: the risk that the business is greatly affected by national defense policies; Risk of high customer concentration; Risks of technology and products failing to meet expectations; The risk that the promotion of civil products is not as expected; The risk that the raised investment project cannot be implemented smoothly.
