\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 47 Nanjing Quanxin Cable Technology Co.Ltd(300447) )
Event: the company released its 2021 annual report, with a revenue of 940 million yuan, a year-on-year increase of 31.88%. The net profit attributable to the parent company was 163 million yuan, with a year-on-year increase of 17.71%, and the net profit deducted from non-profit increased by 43.8%. In 2022q1, the revenue was 304 million yuan, a year-on-year increase of 40.62%; The net profit attributable to the parent company was 55 million yuan, with a year-on-year increase of 41.06%, and the net profit deducted from non attributable to the parent company increased by 41.1%.
Benefiting from the rapid expansion of income, the performance continued to grow at a high level. The company’s revenue in 2021 was 940 million yuan (YoY + 31.9%), and the net profit attributable to the parent company was 163 million yuan (YoY + 17.7%). The reason why the performance growth was lower than the income growth was that the amount of income tax was significantly reduced due to the deduction of deferred income tax assets in 2020, but the net profit not attributable to the parent company was 157 million yuan (YoY + 43.8%), and the growth rate was in line with the expectation.
1) on a quarterly basis, the company’s revenue in 2021q4 was 253 million yuan (YoY + 41.2%, QoQ + 8.12%), revenue in 2022q1 was 304 million yuan (YoY + 40.6%, QoQ + 20.2%), and net profit attributable to parent company was 55 million yuan (YoY + 41.1%), with single quarter revenue and net profit reaching a new high. Due to the change of product structure and other reasons, the gross profit margin of the company in 21 years and 22q1 was 46.5% and 44.9%, down 0.9pct and 3.06pct respectively. It is expected that the gross profit margin of the whole year in 22 years will be about 45.2%.
2) in terms of products, the company’s business is mainly divided into two categories: cables and components, photoelectric system and FC bus. The business subjects are the parent company, Quanxin photoelectric and Shanghai Saizhi respectively. Benefiting from the rapid volume of downstream demand, the two businesses have achieved rapid growth in the past 21 years, with growth rates of 40.87% and 41.36% respectively, of which the growth rate of FC bus business is more obvious. The company will complete the acquisition of the remaining equity of Shanghai Saizhi in 2022h1. We believe that with the diversification of the company’s product matrix and the improvement of product penetration, with the help of industrial east wind, the company’s development is expected to enter the fast lane. It is estimated that the growth rate of the two major businesses in 2022 will be 32.0% and 35.4% respectively.
The inventory has increased significantly, and the high growth on the revenue side can be expected. At the end of the 21st century, the company’s inventory was 559 million, an increase of 64.4% compared with the beginning of the period, of which raw materials, products in process and goods in inventory increased by 68.7%, 39.9% and 69.4% respectively compared with the beginning of the period. The significant increase in goods preparation indicates that the company has abundant orders on hand. The high growth rate of “issued goods” in inventory has verified the high growth of 22q1 income to a certain extent. In 2022q1, the inventory was 602 million, with a month on month increase of 7.7%, and the amount continued to climb. The company can expect high growth in the whole year.
Raised investment projects will gradually reach production capacity, and the capacity bottleneck will be broken. The company raised 320 million yuan in 21 years for the production projects of high-performance cables for aerospace and data cables for rail transit (construction period 2 years / production period 2 years), integrated harness and photoelectric system integration products (construction period 2 years / production period 4 years), FC optical fiber bus series products (construction period 1 year / production period 4 years) and current supplement. In the future, as the projects invested by raising funds gradually reach the production capacity, the bottleneck of the company’s production capacity will be effectively eliminated, with an additional revenue of 1.53 billion yuan and a new net profit of 234 million yuan.
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 240 million, 331 million and 435 million respectively, EPS will be 0.77 yuan, 1.06 yuan and 1.39 yuan, and the corresponding PE of the current stock price is 17x, 13X and 10x. Focusing on the development goal of the component industry, the company has made active layout and continued deep cultivation. In the future, the company will benefit from domestic substitution and rapid and large-scale downstream demand, and maintain the “recommended” rating.
Risk warning: the risk that the demand of downstream industries is less than expected; Risks of drastic changes in industrial competition pattern.
