\u3000\u3 Guocheng Mining Co.Ltd(000688) 301 Iray Technology Company Limited(688301) )
Financial performance: the revenue side and profit side of 2021q1 are in line with expectations
Q1 performance in 2021: the company achieved an operating revenue of 327 million yuan (yoy46.27%), a net profit attributable to the parent of 101 million yuan (yoy35.47%), and a net profit of 112 million yuan (yoy65.10%). The net cash flow from operating activities was 34 million yuan (yoy-50.00%), mainly due to the increase in raw material preparation catalyzed by high boom orders in 2022. The growth rate of net profit attributable to the parent company was slightly lower than that of revenue, which was mainly due to the large fair value loss caused by Zhuhai Cosmx Battery Co.Ltd(688772) shares subscribed by the company as a strategic investor. The fair value loss of the company in 2021q1 reached 39.62 million (the fair value gain in 2020q1 was 3.9 million).
It is optimistic that the business structure will continue to be optimized in 2022, driving the further improvement of gross profit margin.
From the level of gross profit margin: in 2021, the company actively expanded the subdivided fields of Dentistry and industry, and successfully introduced new major customers of dental CBCT and industrial power battery testing. With the introduction and mass production of the company's products in these major customers, the dental and industrial business with high gross profit ushered in rapid development (the year-on-year growth rate reached about 300% and 150%, and the proportion of total revenue increased from 14% in 2020 to about 30% in 2021), The company's overall gross profit margin increased by 3.45pct. In 2021q1, the revenue of the company's high gross margin products such as dental, medical dynamic and industrial detectors still maintained a high growth rate, driving the company's gross margin to a new record high, reaching 57.28% (gross margin 56.18% in 2020). In addition, static products such as general radiation and oral detectors still maintained a relatively stable growth under the disturbance of the epidemic. We expect that with the deepening of cooperation with key customers in dental and industrial fields, The proportion of this part of business will still be further improved, so that the gross profit margin level still has a certain room for improvement. From the level of net interest rate: in 2021q1, the company's net interest rate was 30.99%, down 2.94 PCT year-on-year and 12.38 PCT month on month. It was mainly caused by the increase of non recurring losses, the increase of R & D investment (R & D investment in 2022q1 was 524282 million yuan, yoy 119.19%) and the payment of equity incentive expenses. Considering that equity incentive expenses are mainly amortized in 2022, we expect the net interest rate of the company to gradually recover from 2023. From the perspective of net cash flow from operating activities: in 2021q1, the net cash flow from operating activities of the company was 34 million yuan (yoy-50.00%), mainly due to the increase of raw material preparation catalyzed by high boom orders in 2022 (inventory 2021q1 increased by 30% year-on-year at the end of 2021). As the company's products adopt the sales mode of "production based on sales", and the order framework agreement will be signed with important customers at the beginning of the year, the stock of raw materials will increase, which once again reflects the prosperity of the company's orders. We continue to be optimistic about the high performance growth brought by the continuous release of large orders in dental and industrial fields in 2022.
Profit forecast and valuation
We expect the company's EPS to be 7.95, 11.01 and 14.64 yuan / share from 2022 to 2024, and the closing price on April 25, 2022 corresponds to 40 times of PE in 2022 (29 times of PE in 2023). Considering that the company is an upstream manufacturing attribute, the downstream covers many global head machine manufacturers, the new business expansion in dental and industrial fields is smooth, the performance is high and the growth certainty is strong, the company is still in a relatively undervalued position and maintains the "overweight" rating.
Risk tips
The volatility of the impact of equity incentive on apparent performance, the risk of decline in gross profit margin, the risk that the sales of new products are less than expected, the risk of raw material supply, exchange risk, etc.
