\u3000\u3 Guocheng Mining Co.Ltd(000688) 388 Guangdong Jiayuan Technology Co.Ltd(688388) )
Event: the company announced the results of the first quarter of 2022. 22q1 company achieved an operating revenue of 963 million yuan, an increase of 81.44% year-on-year; The net profit attributable to the shareholders of the listed company was 174 million yuan, an increase of 57.29% year-on-year and 11.74% month on month; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was 168 million yuan, an increase of 58.35% year-on-year and 26.92% month on month; The basic earnings per share is 0.74 yuan / share.
The increase in volume and price drives revenue growth. The company’s 22q1 revenue increased by 81.4% year-on-year (the year-on-year growth rate of revenue in a single quarter has shown a downward trend quarter by quarter since 2021) and increased by 17.8% month on month. Gross profit margin remained high. Due to the rise of the company’s single ton processing fee and the improvement of the capacity utilization rate of Shandong Jiayuan, the gross profit margin of 22q1 reached 30.14%, with a month on month increase of 1.2pct and a year-on-year decrease of 1.2pct.
During the period, the cost increased and the total rate decreased. The company continued to increase R & D investment in product areas such as lithium battery copper foil, high-frequency and high-speed circuit board electrolytic copper foil, including increasing R & D personnel and equipment, and the direct and indirect investment in R & D increased significantly. 22q1 R & D cost was 50.47 million yuan, a year-on-year increase of 112%, and the R & D cost rate reached 5.2%. The management expense of 22q1 company was 24.85 million yuan, with a year-on-year increase of 169%, which was mainly due to the increased investment in resources such as operation, manpower and equipment, the increase of employee salary expenditure, administrative expenses and equity incentive. The overall cost rate of 22q1 was 9.28%, with a year-on-year / month on month decrease of 2.2pct/13.4pct respectively.
The return on net assets increased year-on-year. The company’s net profit attributable to the parent company in 22q1 reached 174 million yuan, which was lower than the lower limit of performance forecast. It is speculated that it may be related to financial income; Non net profit deducted from 22q1 was 168 million yuan, with a year-on-year / month on month increase of 58.4% and 26.9% respectively. The net profit margin of 22q1 sales was 18.07%, with a year-on-year / month on month decrease of 2.8pct/1.1pct. 22q1roe / deduction of non roe reached 4.72% / 4.55% respectively, with a year-on-year increase of about 0.7pct. In addition, according to the preliminary calculation, the company’s profit per ton is expected to exceed 18000 yuan.
The company’s production capacity is released rapidly. In 2021, the company’s initial raised investment project “5000 t / a high-performance copper foil technology transformation project for new energy power battery” was successfully put into operation; In August 2021, the company acquired Shandong xinliyuan electronic copper foil; In December, the first production line with an annual output of 5000 tons of “15000 tons of high-performance copper foil project” invested and constructed by the company in shaping Industrial Park, baidu Town, Meixian district was successfully started and put into trial production. In 2022, Shandong project (15000 tons) and Ningde project (15000 tons) will be put into operation successively. It is expected that the production capacity is expected to reach about 80000 tons by the end of the year, and the production and sales volume may exceed 50000 tons, while the annual sales volume of the company in 2021 is only about 27775 tons.
Investment suggestion: it mainly benefits from the high boom of electric vehicles and the strong demand for lithium copper foil. In the short term, the copper foil industry is expected to be in short supply this year due to factors such as cathode roll capacity. As the only joint venture manufacturer of Contemporary Amperex Technology Co.Limited(300750) copper foil, the company adheres to market and customer orientation, positioning high-end products and continuously optimizing the structure (4.5 μ M extremely thin copper foil), with guaranteed equipment supply and leading profitability in the industry. It is estimated that from 2022 to 2023, the operating revenue will be 5.608 billion yuan / 9.815 billion yuan, the net profit attributable to the parent company will be 1.097 billion yuan / 1.806 billion yuan, the EPS will be 4.68 yuan / 7.71 yuan, and the corresponding PE will be 13.7 times / 8.3 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; The sales volume of new energy vehicles is lower than expected; Risks brought by changes in industrial policies; The risk that the upstream raw materials increase too much and cannot be transmitted to the downstream; The production capacity was lower than expected.
