\u3000\u3 Shengda Resources Co.Ltd(000603) 348 Wencan Group Co.Ltd(603348) )
2022q1 achieved a revenue of 1.243 billion yuan and a net profit attributable to the parent company of 79.4 million yuan
In 2022q1, the company achieved a revenue of 1.243 billion yuan (YoY + 18.4%, mom + 8.4%), a net profit attributable to the parent company of 79.4 million yuan (YoY + 58.3%, mom + 180.2%), a gross profit margin of 19.42% (YoY -1.63pct, mom + 0.55pct), and a net profit margin of 6.39% (YoY + 1.62pct, mom + 3.92pct). The performance exceeded expectations, mainly due to the significant improvement of profitability caused by the large volume of orders, the stabilization of raw material prices and the strengthening of scale effect. Q1’s performance releases a signal of simultaneous rise, and the operating inflection point is approaching. We raise the company’s profit forecast for 20222024. It is estimated that the net profit attributable to the parent company in 20222024 will be 347 / 5.76 / 8.28 (original value 224 / 4.71 / 762) million yuan, EPS will be 1.32/2.20/3.16 yuan / share, corresponding to the current share price PE of 27.4/16.5/11.5 times, maintaining the “buy” rating.
Revenue side: full orders on hand, continuous high growth and long-term growth
In 2021, the company won the fixed points of the integrated rear floor, front assembly and integrated CD column project of two new forces car enterprises, as well as the fixed points of customer battery box, Byd Company Limited(002594) rear subframe and Weilai motor shell in the field of automobile and energy storage. The integrated large structural parts of the company have been successfully trial produced, and it is expected to have the first mover advantage in this field. The contribution growth curve of various products can ensure the high growth of the company’s revenue in the future.
Cost side: effectively transmit the pressure of raw material price rise to downstream customers
According to Changjiang nonferrous metals network, the average price including tax of 2021q1 / Q2 / Q3 / Q4 / 2022q1a00 aluminum is 1.62/1.86/2.05/2.0022200 yuan / ton respectively, while the gross profit margin of the company in each quarter is 21.1% / 17.8% / 15.9% / 18.9% / 19.4% respectively. Although the price of raw materials is still high, the rise of gross profit margin reflects that the company has gradually transmitted cost pressure to the downstream, and the transmission process itself (price adjustment / compensation) is lagging.
Expense side: the scale effect dilutes various expenses and improves the operation quality
The total sales / Management (excluding R & D) / financial expense ratio of 2022q1 company was 7.59%, with a year-on-year ratio of -2.7pct and a month on month ratio of -1.1pct; The total proportion of asset / credit impairment loss in revenue was 1.29%, with a year-on-year decrease of -0.4pct and a month on month decrease of -2.7pct, reflecting the dilution of various expenses and the improvement of operation quality caused by the improvement of the company’s scale effect.
Risk warning: the sales volume of main customers is lower than expected, the epidemic situation is repeated, and the price of raw materials is rising.
