\u3000\u30003 Guangxi Hechi Chemical Co.Ltd(000953) 00095)
Event: the company released the annual report of 2021 on April 23. In 2021, the operating revenue was 1.435 billion yuan (+ 9.18%), the net profit attributable to the parent company was 147 million yuan (- 10.39%), the net profit not attributable to the parent company was 135 million yuan (- 9.85%), the gross profit margin was 38.01% (- 1.97 PCTs), and the net profit margin was 11.03% (- 2.27 PCTs),
The revenue increased steadily, and the rise in the price of upstream raw materials dragged down the company's profitability: during the reporting period, the company achieved an operating revenue of 1.435 billion yuan (+ 9.18%). In 2021, the company's revenue maintained a stable growth thanks to the rapid growth of downstream demand for hoisting machinery braking system and military industry business and the further improvement of the proportion of domestic substitutes. Net profit attributable to parent company was 147 million yuan (- 10.39%), net profit not attributable to parent company was 135 million yuan (- 9.85%), gross profit margin was 38.01% (-1.97 PCTs) and net profit margin was 11.03% (-2.27 PCTs), both of which declined in varying degrees. During the reporting period, the price fluctuation of raw materials dominated by steel obviously led to the further increase of the procurement cost of raw materials (538 million yuan, + 14.18%) in the equipment manufacturing industry. In addition, with the further improvement of the company's existing business layout and the continuous increase of market expansion, the above factors had a certain impact on cost control and further pressure on profitability.
By business:
① industrial brake field
Continue to expand downstream application fields and industrial chain layout, and expand both horizontally and vertically. Based on the port crane market, the company gradually extends the market field to many subdivided fields such as wind power, rail transit and so on. During the reporting period, the company's hoisting, transportation and braking business benefited from the continuous increase in downstream demand, the increase in added value brought by the improvement of product intelligence level and the further increase in the proportion of domestic substitution of key customers in the industry. The revenue (416 million yuan, + 16.47%) maintained a steady growth, but the gross profit margin (43.20%, - 2.06 PCTs) fell due to the fluctuation of upstream raw material prices led by steel; The overall development momentum of wind power business is good in 2021, and China's comprehensive market share has reached 50%. However, due to the fluctuation of upstream raw material prices and the corresponding adjustment of the company's product prices caused by the reduction of the overall installed price of wind power in the reporting period, the company's wind power braking system revenue (506 million yuan, - 0.34%) decreased slightly and the decline of gross profit margin (34.70%, - 5.51pcts) increased during the reporting period.
② military industry
Seize the opportunity of large-scale development of downstream demand and dig deep into supporting demand. The company's military industry mainly relies on its subsidiary ande technology, takes tooling and parts processing and manufacturing as the core, and cuts into the maintenance field through Changsha Tianying. At present, the company's aviation parts products are mainly turbofan engine casings and reverse thrust products of a certain model. During the reporting period, this type of turbofan aeroengine was finalized and batch produced, and the aviation parts business benefited from it. The revenue (180 million yuan, + 33.31%) increased significantly, of which the gross profit margin (45.34%, + 2.26pcts) remained at a high level. Overall, during the 14th Five Year Plan period, the aviation parts processing industry where the company is located benefited from the rapid growth of the supporting demand for new equipment and stock equipment, and the industry entered a period of rising prosperity. Based on this background, the company continued to tap its supporting potential on the basis of existing supporting projects, which is expected to further deepen the business binding with the main engine factory.
③ other business
Relying on the holding / participating subsidiaries Jinmao fluid and Huawu Xingli, the company carries out metal pipe fittings and valve products, which are respectively applied to the construction of civil hydraulic pipe network, power generation, petroleum, chemical industry and other fields. During the reporting period, the revenue (203 million yuan, + 18.65%) increased rapidly, and the gross profit margin (24.80%, - 5.22 PCTs) decreased. The subsidiary Jinmao fluid is currently in the guidance and filing stage of the innovation layer, and is expected to enter the selection layer in the future.
In terms of expenses, the company's three fee expense rate was 16.72% (+ 0.45pcts), which increased slightly, including sales expense rate of 6.83% (+ 0.82pcts), management expense rate of 6.13% (+ 0.43pcts) and financial expense rate of 3.76% (- 0.80pcts). During the reporting period, the company strengthened its market expansion, continued to improve its business development and increased its sales expense rate; With the continuous expansion of the company's scale, the number of employees (1915, + 2.85%) has further increased. At the same time, the company has established a relatively perfect salary system and incentive mechanism, resulting in a slight increase in the rate of management expenses; The availability of raised funds will help the company optimize its capital structure and further reduce its financial expenses.
In terms of R & D expenses, the company's R & D expenses increased slightly by 61 million yuan (+ 4.16%) in 2021. The company continued to maintain a leading and strong innovative R & D ability. Up to now, the company has completed the development of more than 20 series of new products, undertaken 38 key new product development projects in Jiangxi Province and obtained 3 national key new products.
At the end of the reporting period, the company's inventory was 634 million yuan (+ 24.12%), of which the relatively large inventory products (321 million yuan, + 60.16%) and raw materials (97 million yuan, + 19.83%) maintained rapid growth. On the one hand, the company had sufficient orders, actively prepared goods and full production tasks to meet the rapid growth of downstream demand; On the other hand, the company strengthened the production plan management and further strengthened the procurement and preparation in order to better deal with the price fluctuation of raw materials.
During the reporting period, the company's asset impairment loss was 31 million yuan (+ 33.16%), which was significantly higher than that of the previous year, mainly due to the provision for goodwill impairment of 15 million yuan / 11 million yuan respectively made by its subsidiaries Changsha Tianying and Huawu rail transit. The subsidiary Changsha Tianying is mainly engaged in military aircraft maintenance business. During the reporting period, due to multiple factors such as the impact of the epidemic, major adjustments made by downstream customers and the slow progress of order tasks, Changsha Tianying has not completed the performance evaluation indicators. So far, a total of 34 million yuan of goodwill impairment loss has been withdrawn.
Further tap the potential of supporting facilities and grasp the opportunity of large-scale development of demand
The company's military sector business mainly relies on its subsidiaries ande technology and Changsha Tianying. At present, ande technology is the main body. The company completed the acquisition of 100% equity of Sichuan ande Technology Co., Ltd. in July 2016, and began to enter the field of aviation parts manufacturing. Then, the company completed the equity acquisition and capital increase of Changsha Tianying Machinery Manufacturing Co., Ltd. in August 2018. After completion, the company held 51% equity of Changsha Tianying, and further expanded its business scope to the field of aircraft test, maintenance and testing on the original basis. During the reporting period, ander technology had a revenue of 154 million yuan (+ 34.17%) and a net profit of 39 million yuan (+ 3.72%); Changsha Tianying achieved a revenue of 55 million yuan (+ 8.93%) and a net profit of 3.6957 million yuan (+ 66.98%).
It is committed to the R & D and manufacturing of aviation parts and components in Germany. Relying on its key technologies and excellent product quality control level accumulated in the long-term tooling and parts manufacturing process, including hot forming and deformation control of large-size thin-walled parts, argon arc welding process and deformation control of thin-walled parts, ander technology has become an important supplier of main engine plants such as Chengdu airlines, Xi'an airlines and Shanghai Airlines, as well as a strategic supplier of Aecc Aero Science And Technology Co.Ltd(600391) .
As one of the member units of Guifei's "industrial Consortium", relying on its solid R & D and production capacity in the fields of aircraft assembly tooling, inspection and test equipment and parts processing, Changsha Tianying has become a qualified supplier to many main engine factories subordinate to the aviation industry and has established extensive business cooperation.
In the field of tooling, ander technology has successfully provided the necessary consumables, tooling and fixtures for the final assembly of aircraft for the main engine factories such as Chengdu airlines and Xi'an airlines, as well as the multi-purpose mold products for the processing and forming of composite parts such as air inlet and wing, and has formed efficient cooperation with the main engine factory; In the field of parts and components, ander technology has participated in the whole process of the development and production of a large turbofan engine casing and thrust reverser, and is the only supplier at this stage. At present, this model of engine has entered mass production, and the demand is expected to increase greatly during the 14th Five Year Plan period. Ander technology is expected to further benefit from the mass production of this model.
Full orders in hand, waiting for the release of production capacity. At present, the company's military products business has full orders in hand and has been in full production for a long time. The company has previously carried out the fund-raising construction of mass production projects of Aeroengine Parts and aircraft parts. However, due to various factors such as equipment installation and commissioning and plant repair, the construction and operation progress of the above projects is less than expected, and it is expected to be officially put into operation until March 2022 / may 2022 respectively. In order to further alleviate the problem of insufficient production capacity, on this basis, the company carries out the fund-raising and investment construction of the R & D and manufacturing base of aviation equipment and aviation parts. According to the plan, the project is expected to be put into operation successively in 2022, and the production capacity will stabilize in 2024.
In terms of production rhythm, according to the relevant announcement data of the company, after the above projects are constructed and put into operation according to the plan, the output value from 2022 to 2025 is expected to reach 214 million yuan / 339 million yuan / 386 million yuan / 387 million yuan respectively, and the output value in 2025 will reach more than 6 times the output value in 2021, with a compound growth rate of 61.42%.
Maintain the dominant position of leading enterprises and further strengthen industry development
Since its establishment, the company has always focused on the field of medium and high-end industrial braking systems in China. With its competitive advantages in technology, quality and products, the company has maintained good cooperative relations with downstream customers in many fields, including metallurgy, wind power and rail transportation. At present, the company has 15 categories of products, a total of 78 models and categories, with an annual output of more than 100000 sets for many years. The product scale and varieties are far ahead in the industry.
In the wind power equipment sector, the company currently focuses on the construction of large megawatt supporting capacity, and its main products include yaw brake, spindle brake, lock pin, etc., of which yaw brake accounts for about 2 / 3. Relying on its technical advantages accumulated over the years, the company has continued to carry out technical transformation and product upgrading of wind power products. At present, it has the batch supply capacity of high-power fan brakes, and its dominant position in the field of wind power equipment braking system has been further established. China's comprehensive market share has reached 50%. In addition, the company is also actively layout the overseas market. At present, it has entered the supply chain system of many overseas large customers, including Siemens and Ge.
In the lifting machinery sector, the company's products cover many subdivided fields such as port machinery, mining, metallurgy, construction machinery and new energy vehicles, and its market position is firmly in the forefront in mining, metallurgy and other fields. Downstream customers include Shanghai Zhenhua Heavy Industries Co.Ltd(600320) , Baowu steel and other well-known Chinese enterprises. Over the years, the company has always been market-oriented and continuously improved the intelligent level of its products to adapt to the development trend of wharf automation and intelligence at this stage. In the overseas market, relying on the Swiss Furka company, which was acquired in 2019, it has carried out layout and development of the European and American port crane and wharf business market.
Steady progress has been made in fixed value-added projects, and the core advantages of "dual engine" drive have been highlighted
The company completed private placement in December 2021, raising a total of 600 million yuan, which are respectively used to invest in the construction of aviation equipment and aviation parts R & D and manufacturing base and the new intelligent lifting trolley project with an annual output of 3000 cranes.
In recent years, the company has been committed to promoting the optimization of business structure. In the field of military industry, the company entered the aviation equipment industry through the acquisition of ande technology. The company is expected to fully benefit from the rapid improvement of downstream demand of the military industry led by aerospace during the 14th Five Year Plan period, and the business scale is expected to be further improved; In the field of industrial braking, based on the traditional starter braking system products, we continue to expand to the downstream application fields such as wind power and new energy vehicles. At the same time, through the new intelligent crane trolley project invested and constructed by this fund-raising, we have also upgraded the industrial chain from single brake to integrated system, and truly realized the horizontal and vertical expansion of the company in the field of industrial braking.
Investment advice
We believe that:
① based on the port crane market, the company gradually extends the market field to many subdivided fields such as wind power, rail transit and so on. Relying on its competitive advantages in technology, quality and products, it has maintained a good cooperative relationship with downstream customers in many fields, including metallurgy, wind power and rail transportation. The product scale and varieties are far ahead in the industry;
② relying on its technical experience and quality control advantages accumulated in the process of long-term tooling and parts manufacturing, the company has become an important supplier of Chengdu airlines, Xi'an airlines, Shanghai Airlines and other main engine manufacturers, as well as a strategic supplier of Aecc Aero Science And Technology Co.Ltd(600391) the company has participated in the whole process of the development and production of a large turbofan engine casing and thrust reverser, and is the only supplier at this stage. At present, this type of engine has entered mass production, and the company is expected to fully benefit;
③ the company completed private placement in December 2021, raising a total of 600 million yuan, which are respectively used to invest in the construction of aviation equipment and aviation parts R & D and manufacturing base and the new intelligent lifting trolley project with an annual output of 3000 cranes. With the gradual production of the raised investment project, the income and product structure are expected to be further optimized.
Based on the above point of view, we estimate that the company's operating revenue from 2022 to 2024 will be 1.729 billion yuan, 2.273 billion yuan and 2.603 billion yuan respectively, the net profit attributable to the parent company will be 249 million yuan, 386 million yuan and 461 million yuan respectively, and the EPS will be 593 million yuan, 920 million yuan and 1096 yuan respectively. We give the "buy" rating, and the target price will be 15.42 yuan, corresponding to 26 times, 17 times and 14 times PE respectively.
Risk tip: the R & D Progress of product projects is less than expected, and the macro environment is depressed.
