\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 33 Guangzhou Haoyang Electronic Co.Ltd(300833) )
Event: the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved an operating revenue of 618 million yuan, a year-on-year increase of 54.66%, a net profit attributable to the parent company of 136 million yuan, a year-on-year increase of 54.28%, and a net profit deducted from non attributable to the parent company of 122 million yuan, a year-on-year increase of 56.75%; In the first quarter of 2022, the company achieved an operating revenue of 232 million yuan, a year-on-year increase of 266.60%; The net profit attributable to the parent company was 612703 million yuan, a year-on-year increase of 518.52%; The net profit deducted from non parent company was 568227 million yuan, with a year-on-year increase of 500.65%; Single quarter performance hit a record high.
The performance of 2022q1 reached a new high, and the profitability returned to the pre epidemic level.
(1) growth analysis: the company’s revenue recovered quarter by quarter in 2021, reaching a record high in 2022q1; From 2021q1 to 2022q1, the company’s revenue was 63 million yuan, 126 million yuan, 204 million yuan, 224 million yuan and 232 million yuan respectively, with month on month growth rates of 99.53%, 62.00%, 9.81% and 3.28% respectively; The main reason is that the impact of the overseas covid-19 epidemic has slowed down, the policies restricting large-scale gathering activities in European and American countries have been gradually relaxed, and the overseas market demand has warmed up. In 2021, the overseas revenue increased by 83.09% year-on-year.
(2) profitability analysis: in the first quarter of 2022, the gross profit margin of the company’s sales was 48.43%, with a year-on-year increase of 9.57 PCT and a month on month increase of 1.96 PCT; The net profit margin of sales was 26.83%, with a year-on-year increase of 10.78 PCT and a month on month increase of 6.93 PCT; This is mainly because: ① actively respond to the price rise of raw materials in the upstream and complete the price transmission to the downstream; ② The sales scale recovered rapidly, and the expense rate gradually decreased under the advantage of scale; The sales expense rate, management expense rate and financial expense rate were 7.55%, 7.04% and – 2.19% respectively, with a year-on-year increase of – 2.76%, – 7.12% and + 16.65% respectively.
(3) analysis of operating capacity and operating cash flow: affected by the rapid rebound of beneficiary income, the company’s operating capacity has improved rapidly, and the cash flow level has gradually recovered; In the first quarter of 2022, the company’s accounts receivable turnover days were 66.40 days, a year-on-year decrease of 60.79 days; The net cash flow from operating activities was 395258 million yuan, a year-on-year increase of 295.97%.
(4) continuously increase R & D investment and improve patent layout. The company adheres to the development strategy of independent R & D and innovation driven, and continues to increase R & D investment; In 2021, the company invested 41.906 million yuan in R & D, with a year-on-year increase of 34.70%. By the end of 2021, the company has independent intellectual property rights outside China in the modeling, electronics, optics, thermal, mechanical structure and control system of its main products. The company and its subsidiaries have a total of 552 valid patents in China, including 58 invention patents, 326 utility model patents and 168 design patents; The company and its subsidiaries have a total of 84 overseas patents; 318 software copyrights; The company was rated as “manufacturing single champion demonstration enterprise” and “specialized special new small giant enterprise” by the Ministry of industry and information technology.
The demand for global performing arts activities has recovered rapidly, and the market space for stage lighting equipment is broad.
(1) at the overseas level, with the gradual expansion of the immune population base in various countries, the policy of prohibiting large-scale gathering activities introduced in some overseas regions due to the covid-19 pneumonia epidemic is being relaxed, and the performing arts activities are recovering rapidly. According to the vivation report, the number of vivation concerts reached 9323 in 2021q4, which recovered to 73.70% of that in 2019q4 before the epidemic, and the number of spectators reached 16.112 million, which recovered to 66.88% of that in 2019q4 before the epidemic. We expect that the global demand for performing arts equipment is expected to rebound rapidly in 2022 and return to the pre epidemic level.
(2) at the Chinese level, with the continuous development of China’s national economy, the continuous increase of residents’ per capita disposable income and the continuous upgrading of consumption structure, the development of China’s culture and entertainment industry has been driven. According to the data of China Performance Industry Association, the overall economic scale of China’s performance market has increased from 46.922 billion yuan in 2016 to 53.8 billion yuan in 2019, with an annual compound growth rate of 4% – 5%. The prosperity of the performance market has driven the demand for stage entertainment lighting equipment.
(3) in 2019, the scale of China’s performance equipment market was nearly 200 billion yuan, and the dance lighting equipment exceeded 40 billion yuan. In recent years, with the improvement of people’s personalized consumption demand and the introduction of corresponding policies, the scale of China’s performing arts market is expected to further expand and promote the continuous development of the performing arts equipment market. In 2019, the scale of China’s performing arts equipment market was 196.06 billion yuan, and it will reach 264.27 billion yuan in 2024, with a compound annual growth rate of 6.15%. According to our calculation, the market scale of China’s stage lighting equipment in 2019 will be 40.799 billion yuan (accounting for 22.02%), and it is expected to reach 72.889 billion yuan (accounting for 27.58%) in 2024, with an annual compound growth rate of 12.31%.
The company has prominent competitive advantages and its market share is expected to increase rapidly.
(1) performance lighting equipment manufacturing industry is a highly competitive market with relatively low market concentration. According to the statistics of foreign institutions, in 2017, the market share of the top three companies in global production scale was 14.28%, and the market share of the top ten companies in production scale was 27.88%.
(2) after years of development, China’s performance lighting equipment manufacturing industry has made considerable progress. As of 2018, the total number of enterprises in China’s performing arts equipment industry is more than 7000. China has become an important manufacturing base of lighting, sound and performing arts equipment products in the world, especially in the Pearl River Delta. More than 70% of enterprises gather in the Pearl River Delta, and their output value accounts for about 80% of the total industrial output value.
(3) the company’s products have strong competitive advantages. After years of development, the company’s products and technology have been highly recognized by the market and customers, and won a number of patents and product awards; The company’s products have participated in many influential large-scale projects outside China, enriching and improving the presentation means of culture and art; The product technology is the world’s leading, with good control accuracy, waterproof performance, heat dissipation efficiency and light color consistency.
(4) the company strengthened the management of raw materials and suppliers, accelerated the improvement of production capacity and improved product delivery capacity. By means of domestic substitution of some parts and improving the compatibility of product parts, the company actively gives full play to the advantages of good cash liquidity and rich management experience of the material control team, responds to the shortage of raw materials in the upstream, and ensures the overall delivery ability of the company to customer orders. In order to rapidly increase the production capacity, the company will rapidly increase the production capacity of the company by adding new rental sites and optimizing and adjusting the internal production line and warehouse of the company, so as to meet the demand for production capacity in the process of market recovery, and the market share is expected to increase rapidly.
Maintain the “buy” rating. Benefiting from the rapid rebound in the demand of the global performing arts market, the company’s performance in 2022q1 reached a new high. We raised the profit forecast and predicted that the company’s revenue from 2022 to 2024 would be 1.088 billion yuan, 1.461 billion yuan and 1.892 billion yuan respectively (the predicted value from 2022 to 2023 was 937 million yuan and 1.375 billion yuan before adjustment); Increased by 76.08%, 34.22% and 29.53% respectively year-on-year; The net profit attributable to the parent company was 297 million yuan, 405 million yuan and 525 million yuan respectively (the predicted value from 2022 to 2023 before adjustment was 245 million yuan and 367 million yuan), with a year-on-year increase of 118.31%, 36.56% and 29.57% respectively; EPS is 3.52 yuan, 4.81 yuan and 6.23 yuan respectively; According to the share price on April 26, 2022, the corresponding PE is 17.1, 12.5 and 9.6 times respectively. Overseas performing arts activities continued to recover and the demand for performing arts equipment rebounded rapidly. As the leader of stage lighting equipment in China, the company is expected to continue to increase its market share in the future and maintain its “buy” rating.
Risk warning: the risk of international trade friction; Risks of business model; Exchange rate fluctuation risk; Risks of outsourced production; The risk of repeated overseas outbreaks; Risk of raw material supply; Risk of loss of core technology and management personnel; The public data used in the research report may have the risk of information lag or untimely update; Deviation risk of industry market scale measurement.
