\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 885 Hongfa Technology Co.Ltd(600885) )
Event: on April 26, the company released its 2021 annual report. In the past 21 years, the company achieved a revenue of 10.023 billion yuan, 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%; The net profit deducted from non parent company was 923 million yuan, with a year-on-year increase of 32.98%; The basic earnings per share is 1.43 yuan. 22q1 company achieved a revenue of 2.875 billion yuan, a year-on-year increase of 20.82%; The net profit attributable to the parent company was 279 million yuan, a year-on-year increase of 20.78%; Net profit deducted from non parent company was 252 million yuan, with a year-on-year increase of 20.66%; The basic earnings per share is 0.38 yuan. The company plans to pay a cash dividend of 4.29 yuan (including tax) for every 10 shares and increase 4 shares.
Profitability has improved and cost pressure is gradually transmitted to the downstream. In terms of gross profit margin, the main raw materials of the company’s products include copper, silver, enamelled wire, engineering plastics, etc. the price of bulk commodities increased sharply in 2021, which put great pressure on the cost of raw materials of the company. In 21 years, the gross profit margin of the company decreased by 2.01ptcs to 34.58% year-on-year; At the end of the 21st century, the company raised the price of downstream customers moderately to cover the pressure on the cost side of raw materials. The gross profit margin of 22q4 company increased by 0.72pct to 33.49% month on month. In the future, with the optimization of the company’s product structure, the improvement of scale effect and the rise of product ASP, the company’s gross profit margin is expected to continue to improve in 22 years. In terms of net interest rate, the company actively took cost reduction and efficiency enhancement measures. In 22 years, the sales expense rate and management expense rate decreased by 1.6pcts, 0.37pct to 3.43% and 9.97% respectively year-on-year, while the R & D expense rate continued to increase. Benefiting from reasonable expense control, the net interest rate of the company in 21 years continued to increase by 0.05pct year-on-year, and the net interest rate of 22q1 continued to rise month on month.
Demand in traditional areas is improving and is expected to maintain stable growth. 1) Power relay: the industry is expected to maintain low-speed and stable growth. In 2021, the company’s global market share will increase by 3%, and its market share in high-end smart appliances will further expand. 2) Power relay: affected by the epidemic and chip shortage in 21 years, the smart meter will enter a new round of rising cycle in 22 years. 3) Industrial relay: the company has formed stable cooperation with benchmark customers such as Schneider and abb and paid close attention to the domestic alternative dividend. It has established cooperative relations with CRRC and China Railway Signal & Communication Corporation Limited(688009) companies, and the demand is steadily rising. 4) Signal relay: 5g and other new technologies expand product application scenarios. In 22 years, the company pioneered the fifth generation signal relay. The product value has increased and the company has stronger bargaining power. It is expected to benefit from the dual drive of industry demand recovery and new product volume.
The growth rate of automobile related business is bright, and there is a large growth space for low-voltage electrical appliances in the future. 1) Automotive Relay: the company’s customer structure continues to improve and its market share increases rapidly. 2) High voltage DC relay: the market share of the company has reached 36% in 21 years, surpassing Panasonic to become the first in the world. Tesla, Mercedes Benz, BMW and other high-end car manufacturers will continue to contribute to the increment. 3) Low voltage electrical appliances: the market scale is nearly 100 billion yuan. The company’s product categories are constantly enriched and have been sold in major markets such as North America, Europe and China. In the past 21 years, the company’s low-voltage electrical appliance market sales and per capita payment collection have increased by more than 20%, which is expected to accelerate in the future.
Investment suggestion: we expect the company’s revenue in 22-24 years to be 12.519 billion yuan, 15.731 billion yuan and 20.079 billion yuan respectively, with growth rates of 24.9%, 25.7% and 27.6% respectively; The net profit attributable to the parent company was 1.390 billion yuan, 1.827 billion yuan and 2.46 billion yuan respectively, with growth rates of 30.8.1%, 31.5% and 35.5% respectively. Corresponding to the closing price on April 26, the company’s valuation for 22-24 years is divided into 21x, 16x and 12x. Maintain a “recommended” rating.
Risk tip: the sales volume of new energy vehicles is lower than expected; Commodity prices rose more than expected.
