\u3000\u3 Jiangsu Eastern Shenghong Co.Ltd(000301) 058 Cofco Engineering & Technology Co.Ltd(301058) )
Key investment points
Event: the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company realized an operating revenue of RMB 2.170 billion, a year-on-year increase of 6.30%, a net profit attributable to the parent company of RMB 161 million, a year-on-year increase of 25.12%, and a net profit deducted from non attributable to the parent company of RMB 152 million, a year-on-year increase of 24.54%; In the first quarter of 2022, the company achieved an operating revenue of 386 million yuan, a year-on-year increase of 71.62%, a net profit attributable to the parent company of 28.563 million yuan, a year-on-year increase of 57.53%, and a net profit deducted from non attributable to the parent company of 263335 million yuan, a year-on-year increase of 72.30%; In line with market expectations.
The performance of 2022q1 increased rapidly, and the profitability increased rapidly in 2021.
(1) growth analysis: in 2021, the company's revenue increased by 6.30% year-on-year; The net profit attributable to the parent company increased by 25.12% year-on-year, and the net profit excluding non attributable to the parent company increased by 24.54% year-on-year; The main reasons are as follows: ① the company strengthened market expansion, relied on the capital market to enhance the company's market influence and brand awareness, and the order volume increased significantly; ② The company solidly promoted fine management, implemented the requirements of "two benefits and four rates" for high-quality development, and steadily improved asset quality and profitability; ③ The company's product structure has been continuously optimized, and the proportion of three high gross profit businesses including design consulting business, electromechanical engineering system delivery business and equipment manufacturing business has been continuously increased. In the first quarter of 2022, the company's revenue increased by 71.62% year-on-year, the net profit attributable to the parent increased by 57.53% year-on-year, and the net profit excluding non attributable to the parent increased by 72.30% year-on-year; Mainly due to the growth of orders on hand, the revenue of newly acquired companies in 2021q4 increased.
(2) profitability analysis: in 2021, the gross profit margin of the company's sales was 21.41%, with a year-on-year increase of 2.23 PCT; The net profit margin of sales was 7.60%, with a year-on-year increase of 1.13 PCT; The main reasons are: ① the company's product structure is improved and the proportion of high gross profit products is increased; ② The scale advantage is prominent, and the expense rate further decreases. In 2021, the sales expense rate, management expense rate and financial expense rate are 0.81%, 6.56% and -0.51% respectively, with a year-on-year increase of -0.07pct, + 0.63pct and -0.26pct respectively. In the first quarter of 2022, the gross profit margin of the company's sales was 19.70%, a year-on-year decrease of 8.70pct; The net profit margin on sales was 7.30%, a year-on-year decrease of 0.84pct; This is mainly because the first quarter is the off-season of income, which accounts for a small proportion of the annual income, and the amortized cost rate has increased; In the first quarter of 2022, the sales expense rate, management expense rate and financial expense rate were 1.03%, 10.64% and -0.85% respectively, with a year-on-year increase of -0.52pct, -4.95pct and + 0.16pct respectively.
(3) analysis of operating capacity and operating cash flow: with the expansion of the company's revenue scale, the scale of accounts receivable further expanded. In 2021, the turnover days of accounts receivable of the company were 84.97 days, with a year-on-year increase of 3.77 days; The company's main customers are well-known enterprises at home and abroad, with good credit. There is no overdue payment in the process of cooperation. The company's cash flow level increased significantly and reached a record high. The net cash flow from operating activities reached 261 million yuan, a year-on-year increase of 12.99%.
(4) continuously increase R & D Investment: in 2021, the company's R & D expenditure was 814209 million yuan, a year-on-year increase of 53.18%, accounting for 3.75% of revenue, a year-on-year increase of 1.15 PCT; The main reasons are as follows: ① the company has always put scientific and technological innovation in a prominent position in line with the strategy, and maintained the continuous burst of innovation according to the working idea of "production generation + development generation + reserve generation"; ② The company accelerated the recruitment of R & D talents, and the number of R & D personnel reached 430, with a year-on-year increase of 10.82%. As a leading company in the R & D of innovative technologies for grain, oil and cold chain in China, the company has actively carried out extensive special technological innovation research. In 2021, it undertook 38 national and local major scientific research projects, including 16 R & D projects that have been accepted or completed; A number of technical achievements have been achieved, including 4 national invention patents, 79 utility models and 2 appearance designs; It has won many commendations and honors issued by government departments or industry associations, and a total of 25 important provincial, ministerial and industry awards. Organize the preparation and promulgation of 6 industry normative and standard documents.
Benefiting from the high downstream demand, the new orders signed by the company increased rapidly in 2021.
(1) industrial policy + downstream high scenery promotes the rapid development of the industry, and the company has the advantages of technology and brand. The State Council has issued a series of policies to promote the rapid development of grain and oil industry in the boom and lower reaches of the government. Taking grain and oil storage as an example, the annual investment is 116.9 billion yuan, including 4.676 billion yuan for design and 40.124 billion yuan for electromechanical engineering; In 2021, the company's design market accounted for 11.33% and electromechanical engineering market accounted for 3.02%; The company has brand and technical advantages, and its market share is expected to increase rapidly in the future.
(2) guided by national policies and strategies, the newly signed contract amount of the company has reached a new record. In 2021, the newly signed contract amount of the company was 2.816 billion yuan, a year-on-year increase of 37.65%; By industry, the newly signed contract value of grain and oil processing industry was 2.365 billion yuan, a year-on-year increase of 40.27%, and the newly signed contract value of cold chain logistics industry was 451 million yuan, a year-on-year increase of 25.36%; By product category, the newly signed electromechanical engineering system delivery business contract amount was RMB 1.112 billion, a year-on-year increase of 9.99%, the newly signed design consulting business contract amount was RMB 770 million, a year-on-year increase of 52.52%, and the newly signed equipment manufacturing business contract amount was RMB 625 million, a year-on-year increase of 31.27%.
Maintain the "overweight" rating. We estimate that the company's revenue from 2022 to 2024 will be 3.153 billion yuan, 4.338 billion yuan and 5.428 billion yuan respectively; Increased by 45.33%, 37.59% and 25.11% respectively year-on-year; The net profit attributable to the parent company was 297 million yuan, 444 million yuan and 579 million yuan respectively, with a year-on-year increase of 83.92%, 49.52% and 30.35% respectively; EPS is 0.58 yuan, 0.87 yuan and 1.13 yuan respectively; According to the share price on April 25, 2022, the corresponding PE is 29.9, 20.0 and 15.3 times respectively. Benefiting from the "food security" policy and the new era of ice and snow sports, as a leading company in China's grain and oil equipment engineering and cold chain logistics, the company is expected to rapidly increase its market share in the future and maintain the "overweight" rating.
Risk warning: Macroeconomic Fluctuation and investment structure adjustment risk; The risk caused by the outbreak of novel coronavirus pneumonia; The risk of declining profitability due to intensified industry competition; The risk of failure of scientific and technological innovation; The risk that the technology research and development fails to achieve the expected results; The risk that the information and data used in the research report are not updated in time.
