\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 885 Hongfa Technology Co.Ltd(600885) )
In 2021 / 2022q1, the revenue was + 28% / + 21% year-on-year, and the net profit attributable to the parent company was + 28% / + 21% year-on-year, which was in line with market expectations. The company achieved a revenue of 10.023 billion yuan in 2021, a year-on-year increase of + 28.18%; The net profit attributable to the parent company was 1.063 billion yuan, a year-on-year increase of + 27.69%. 2021q4 / 2022q1 achieved revenue of 2.458 billion yuan / 2.875 billion yuan respectively, a year-on-year increase of + 3.21% / + 20.82%; The net profit attributable to the parent company was 242 million yuan / 279 million yuan, a year-on-year increase of + 2.90% / + 20.78%. The performance is in line with market expectations. As of 2022q1, the company has abundant orders in hand and the production capacity is relatively saturated. The company continues to promote the reasonable increase of production capacity through technological transformation.
The increase of bulk and shipping prices affects the gross profit, and the implementation of hedging measures such as price increase at the end of 2021 is effective. In 2021, the gross profit margin was 34.58%, a year-on-year decrease of 2.37pct; The gross profit margin of 2022q1 was 33.49%, with a year-on-year increase of -2.53pct and a month on month increase of + 0.72pct. At the end of 2021, the company transmitted the pressure of raw material price increase through price increase & logistics freight 2022q1 also improved, so the gross profit margin of 2022q1 began to increase month on month.
High voltage DC relay has made great progress, doubling in 2021 and expected to continue to increase in 2022. The company is bound to Tesla, general motors, Volkswagen, BMW and other global mainstream new energy vehicle enterprises. With the large sales volume of core customers, HVDC will double in 2021, and the market share of global sales will increase to 36%. BDU, epoxy and ceramic new products accelerate the progress of benchmarking customers. We expect that the revenue of 2022q1 is expected to double year-on-year. Looking forward to 2022, the growth of new energy vehicle business is still strong, and the revenue is expected to more than double year-on-year.
Traditional downstream tapping potential of power relay + connecting rod of emerging industry. The relative recovery of global household appliance demand in 2021 + the shortage of global supply chain has brought domestic substitution, so the company’s sales have increased more; The structural growth in emerging fields is high, among which the photovoltaic relay has been recognized by benchmark customers such as Huawei and sunshine, and the overall sales share is 57%. Looking forward to 2022, the demand in the field of household appliances will respond in advance and the growth rate will remain stable with the slowdown of the industry demand, while the field of new energy will continue to grow rapidly, so the annual revenue is expected to increase by + 10-15% year-on-year.
The integration of auto relay Haila replaces foreign investment and new products, and its performance is bright in 2021. In 2021, although the automotive industry was partly affected by the shortage of chips, Hongfa repeatedly affected the supply of overseas giants by virtue of new customers & new products, superimposed the epidemic, continued to seize the sales share of competitors and achieved rapid growth. Global auto production and sales are expected to pick up in 2022, the substitution is still continuing, and the revenue is expected to increase by + 15-20% year-on-year.
The signal and industrial control relay increased high, and the power fell due to the influence of core shortage. 1) In 2021, the signal relay will usher in high growth due to the high prosperity of the downstream; 2) Industrial Relays have benefited from the expansion of new fields such as key customer demand + Rail Transit & new energy to maintain rapid growth; 3) Power relays are affected by chip supply, and smart meters are delivered. We expect that the revenue of signal / industrial control relay in 2022 will be + 20-25% year-on-year, continuing a good trend; Assuming that the bidding volume of global electricity meters picks up, electricity is expected to increase by about + 10% year-on-year.
The business of low-voltage electrical appliances is advancing steadily, and China and foreign two wheel drive. Mainly due to the recovery of overseas building power distribution and HVAC market, the shipment of low-voltage appliances increased rapidly in 2021. In 2022, with the good prosperity of real estate in North America and the recovery of European power industry, the annual revenue is expected to be + 10-20% year-on-year.
Profit forecast and investment rating: considering the impact of bulk and shipping, we lowered the net profit attributable to the parent company from 2022 to 2023 to 1.36 billion yuan (- 290 million yuan) / 1.8 billion yuan (- 380 million yuan). We expect 2.31 billion yuan in 2024, a year-on-year increase of + 28% / + 33% / + 28% respectively, corresponding to 24 times, 18 times and 14 times the current price of PE respectively. The target price is 72.8 yuan, corresponding to 40 times PE in 2022, maintaining the “buy” rating.
Risk tip: macroeconomic downturn, intensified epidemic in China, intensified competition, etc.
