\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 27 Shanghai Huace Navigation Technology Ltd(300627) )
Event:
Shanghai Huace Navigation Technology Ltd(300627) release the annual report of 2021 and the first quarterly report of 2022:
1) in 2021, the operating revenue reached 1.903 billion yuan, with a year-on-year increase of 35.02%; The net profit attributable to the parent company was 294 million yuan, a year-on-year increase of 49.45%; The net profit deducted from non parent company was 230 million yuan, with a year-on-year increase of 53.17%;
2) Q1 in 2022: operating revenue of 422 million yuan, with a year-on-year increase of 21.97%; The net profit attributable to the parent company was 67 million yuan, a year-on-year increase of 34.92%; The net profit deducted from non parent company was 50 million yuan, with a year-on-year increase of 43.15%;
Key investment points:
Based on high-precision positioning, expand four industries, and increase the proportion of solution business revenue. At present, the company’s products and solutions mainly involve four industries: Construction and infrastructure, geospatial information, resources and public utilities, Siasun Robot&Automation Co.Ltd(300024) and driverless. In 2021, the revenue growth rate of each industry was 25.80%, 35.22%, 51.92% and 27.61% respectively. The products, systems and solutions provided by the company have made a number of progress and good market promotion achievements in the above industries. The solutions provided by the company have been recognized by the market due to its industry-leading technology and differentiation advantages, realizing business growth and increasing the proportion of revenue. In 2021, the system application and solution business realized an operating revenue of 810 million yuan, with a year-on-year increase of 77.8%, accounting for 42.54% of the operating revenue, with a year-on-year increase of 10.24 PCT.
Strategic goods preparation + R & D cost reduction to build competitive advantages in the industry. In 2021, the company achieved an overall gross profit margin of 54.64%, with a year-on-year increase of 0.36pct. Affected by many factors such as rising commodity prices, tight market supply and demand and covid-19 epidemic, the price of some raw materials increased significantly. Therefore, the company enabled strategic goods preparation, improved the planning ability of the supply chain and reduced the impact of rising raw material prices on the company’s gross profit margin. In 2021, the company invested 333 million yuan in R & D, with a year-on-year increase of 59.14%. The company continues to carry out research and development to reduce costs and replace domestic raw materials and parts; The establishment of the company’s core technical barriers and the improvement of the competitive advantages of products and solutions promote the company to continuously lead the market and improve its bargaining power.
The automatic driving project has been designated by many auto enterprises, and its future performance is expected to benefit. In 2021, the company actively expanded the automatic driving business of passenger cars and has been designated as the designated supplier of automatic driving position unit business of Nezha automobile, Geely lutes, Byd Company Limited(002594) automobile and Great Wall Motor Company Limited(601633) . The project period is from 2021 to 2026. At present, it is in the development and testing stage before mass production. After the mass production of the above models, the company’s operating performance is expected to benefit
As a leading enterprise of high-precision satellite navigation and positioning in China, the profit prediction and investment rating company focuses on the core technology of high-precision navigation and positioning and has an industry-leading net profit margin. As the company continues to expand to downstream application fields, the proportion of solution business is expected to increase and drive the company’s gross profit margin upward. We estimate that the operating revenue of the company from 2022 to 2024 will be 2.509/3.275/4.265 billion yuan, with a year-on-year growth rate of 32% / 31% / 30% respectively, and the net profit attributable to the parent company will be 3.91/5.23/698 billion yuan, with a year-on-year growth rate of 33% / 34% / 34% respectively. The corresponding dynamic PE from 2022 to 2024 is 28 / 21 / 16 respectively, maintaining the “buy” rating
Risk warning: the R & D progress is not as expected; Overseas market expansion is less than expected; Intensified market competition; The downstream expansion of the industrial chain is less than expected; The application of intelligent vehicle high-precision positioning products is less than expected; The high-precision positioning industry is difficult to copy the growth path of foreign giants due to different environments.
