\u3000\u3 Shengda Resources Co.Ltd(000603) 583 Zhejiang Jiecang Linear Motion Technology Co.Ltd(603583) )
Event 1:
The company released its annual report for 2021. The annual operating revenue increased by 41.15% and the net profit attributable to the parent decreased by 33.29%: 1) in 2021, the company achieved a revenue of 2.637 billion yuan, a year-on-year increase of + 41.15%, and Q4 achieved a revenue of 872 million yuan, a year-on-year increase of + 69.20%; 2) In the whole year, the net profit attributable to the parent company was 270 million yuan, a year-on-year increase of – 33.29%, and the net profit attributable to the parent company in Q4 was 66 million yuan, a year-on-year increase of + 15.41%; 3) In the whole year, the non net profit deducted was 226 million yuan, a year-on-year increase of – 28.25%, and the non net profit deducted in Q4 was 50 million yuan, a year-on-year increase of + 46.16%. 4) The net operating cash flow of the company in the whole year was 138 million yuan, a year-on-year increase of – 72.00%.
From the perspective of splitting the company’s business, the main business has developed steadily:
In the whole year, the sales revenue of linear drive products was 2.633 billion yuan, a year-on-year increase of 41.11%, and the gross profit margin was 26.98%, which was -12.27pct compared with the same period last year; In terms of regions, China and foreign countries achieved sales revenue of 588 million yuan and 2.045 billion yuan respectively, with a year-on-year increase of 42.69% and 40.66% respectively, and the gross profit margin was 24.94% and 27.57%, with a year-on-year increase of -6.63 PCT and -13.86 PCT; According to the sales mode, the sales revenue of distribution and direct selling was 226 million yuan and 2.407 billion yuan respectively, with a year-on-year increase of 50.56% and 40.28% respectively, and the gross profit margin was 30.34% and 26.67%, which was -6.82pct and -12.77pct compared with the same period last year.
Affected by the price rise of raw materials and tariffs, the profitability is affected:
The annual gross profit margin of the company was 26.95%, year-on-year -12.36pct, and Q4 gross profit margin was 24.21%, year-on-year + 1.09pct; The annual net interest rate was 10.20%, year-on-year -11.42pct, and Q4 net interest rate was 7.50%, year-on-year -3.32pct; In 2021, the company’s acquisition of leg and increased R & D investment led to an increase in the expense rate. In the 21st year, the expense rate was 18.05%, a year-on-year increase of 2.95pct, and the Q4 expense rate was 22.59%, a year-on-year increase of 8.81pct. Among them, the sales / management / R & D / financial expense rate in the 21st year was 4.47% / 7.74% / 7.05% / – 1.21% respectively, with a year-on-year change of -0.77pct / + 3.03pct / + 1.59pct / – 0.89pct respectively.
Event 2:
The company released the first quarterly report of 2022. In 2022q1, the company achieved a revenue of 708 million, a year-on-year increase of + 56.69%; The net profit attributable to the parent company was 76 million, a year-on-year increase of + 17.63%; The net profit deducted from non return to parent was 61 million, a year-on-year increase of + 2.53%; The gross profit margin is 26.62%, yoy-4.00pct; The net interest rate is 10.62%, yoy-3.57pct; During the first quarter, the expense rate of the company increased. The expense rate in 2022q1 was 17.23%, with a year-on-year increase of 1.08pct, of which the expense rates of sales / management / R & D / finance were 4.66% / 5.93% / 7.34% / – 0.71%, with a year-on-year change of -0.65pct / + 0.40pct / + 0.26pct / + 1.06pct respectively.
The capacity of initial raised investment projects was released, and non-public offering projects were steadily promoted:
In 2021, the capacity of the company’s IPO funded projects was released steadily, further improving the company’s capacity scale and the level of automatic and intelligent manufacturing; The company’s non-public offering and investment projects, including “smart office drive system upgrading and expansion project”, “digital system upgrading and production line intelligent transformation project”, are in normal progress; In combination with the raised investment project, the company will strive to build an intelligent manufacturing and machine replacement manufacturing system with Jiechang characteristics, comprehensively improve the company’s production and operation efficiency and market response speed, and effectively improve the company’s market competitiveness.
Plan and promote overseas mergers and acquisitions, and steadily promote the internationalization strategy:
In 2021, the company actively planned to promote the acquisition of logicendeavorgroup GmbH project and completed the equity delivery. This acquisition is an important strategic way for the company to take the path of extension growth. On the one hand, it can substantially improve Zhejiang Jiecang Linear Motion Technology Co.Ltd(603583) in technology, brand and channel, and help the company expand its influence in Europe; On the other hand, the two companies can share resources and form synergy in R & D, production, market and brand all over the world to achieve win-win results.
Profit forecast: taking into account the cyclical fluctuations of downstream industries, the rise of tariffs, raw materials and freight, we expect the net profit attributable to the parent company from 2022 to 2024 to be 434 million (the former value was 540 million), 641 million (the former value was 690 million) and 847 million respectively, and the corresponding PE is 19.88/13.47/10.19x respectively, maintaining the buy rating.
Risk tips: risks of macroeconomic changes and cyclical fluctuations in downstream industries, risks of fierce market competition, risks of changes in U.S. tariff policies, etc.
