\u3000\u3 Guocheng Mining Co.Ltd(000688) 063 Pylon Technologies Co.Ltd(688063) )
Event: the company announced the results of the first quarter of 2022. 22q1 company achieved an operating revenue of 814 million yuan, a year-on-year increase of 216.18%; The net profit attributable to the shareholders of the listed company was 101 million yuan, a year-on-year increase of 70.45%; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was 990325 million yuan, with a year-on-year increase of 72.69%; The basic earnings per share is 0.65 yuan / share.
The increase of sales volume promotes the high growth of revenue. Thanks to the vigorous development of the energy storage market, the company’s investment and deep cultivation in the energy storage industry for many years, and the raised investment project was put into operation in 2021, the company’s 22q1 sales reached 566.55mwh, a significant increase year-on-year. Thus, the revenue of 22q1 company reached 810 million yuan, with a year-on-year growth rate of 216%, about 70pct higher than that of 21q4; 22q1 revenue increased by 6% month on month.
Proper cost control. Although the company invested heavily in R & D projects and expanded the R & D team, resulting in an increase in R & D personnel, direct investment in R & D projects, product testing and certification fees and share based payment fees, and the R & D expenses in 22q1 increased by 151% year-on-year to 620 million yuan, the R & D expense rate, sales expense rate and management expense rate decreased year-on-year. Therefore, the total expense rate decreased by 1.8pct year-on-year to 12.8% and 13.4pct month on month.
Profitability improved month on month. The tight supply of raw materials, sharp rise in prices, insufficient international shipping capacity, increased logistics costs and other factors combined, resulting in a gross profit margin of 27.5% in 22q1, down 11.1pct year-on-year, but up 3.7pct month on month. The 22q1 net profit of the company reached 100 million yuan, and the net interest rate reached 12.4%, up 4pct month on month. 22q1roe / roe after deduction were 3.34% / 3.26% respectively, with a year-on-year increase of about 1.2pct. In addition, thanks to the increase in sales receipts, the company’s net operating cash flow in 22q1 increased by 87% year-on-year.
The global energy storage market has entered an explosive period. The European market shows an accelerating trend with the accelerated promotion of governments to achieve the goal of green energy and the continuous rise of energy prices; The U.S. market shows explosive growth under the background of large infrastructure construction plan and ITC extension; Australia, Japan, South Africa and other existing markets maintained steady growth; The acceptance of new energy matching and energy storage in emerging markets is rising, while China’s energy storage has accelerated in project planning and capacity layout.
Rapid product iteration and actively promote localization and substitution. In 2021, the company released a new generation of 5kwh household energy storage products and 100kwh industrial and commercial energy storage products, with energy density / power performance increased by 10% / 20% respectively. It is expected to realize large-scale sales in 2022. The on-board energy storage and 5g energy storage products launched by the company have also been quickly recognized by the market with high magnification performance and high reliability. In order to cope with the shortage of global chip supply, the company increased R & D investment and completed the localization and replacement of most core parts.
Investment suggestion: as one of the earliest energy storage leaders to go to sea, the company has high-quality customer resources, high brand awareness, comprehensive service ability of vertical integration of industrial chain, product safety certification in major global markets, and superior independent innovation and R & D strength. It is estimated that the operating revenue of the company from 2022 to 2023 will be 5.053 billion yuan / 8.085 billion yuan, the net profit attributable to the parent company will be 636 million yuan / 1.171 billion yuan, the EPS will be 4.11 yuan / 7.56 yuan, and the corresponding PE will be 34.3 times / 18.6 times. It will be covered for the first time and given a “recommended” rating.
Risk warning: the impact of covid-19 epidemic on the industry exceeded expectations; Risks brought by changes in industrial policies; The risk that the upstream raw material supply is tight and the increase is too large to be transmitted to the downstream; Risks caused by chip shortage; Insufficient international shipping capacity, increased logistics costs, etc.
