\u3000\u3 Shengda Resources Co.Ltd(000603) 915 Jiangsu Guomao Reducer Co.Ltd(603915) )
Event: ① the company released the financial report for 2021, realizing a revenue of 2.944 billion yuan, a year-on-year increase of 34.81%; The net profit attributable to the parent company was 462 million yuan, a year-on-year increase of 28.66%;
② the company released the first quarterly report of 2022, realizing a revenue of 610 million yuan, a year-on-year decrease of 5.05%; The net profit attributable to the parent company was 65 million yuan, a year-on-year decrease of 18.55%.
Core view: the performance is in line with expectations, and the company’s operation is impacted by the macroeconomic downturn and the epidemic. The negative growth of Q1 revenue and net profit in 2022 is due to the impact of the epidemic on revenue recognition and the decline of gross profit margin due to intensified competition. In March, the year-on-year growth rate of social finance stock rebounded to 10.6%, an increase of 0.4 PCT compared with February. Social finance is a forward-looking indicator of the automation industry. Based on the marginal changes of this data, we judge that the industry is at the bottom stage of fundamentals, and the recovery rhythm depends on the rhythm of epidemic control and the strength of policy support. The company’s high-end reducer and construction machinery reducer business have made a breakthrough and become a new performance growth point.
In 2021, the performance increased rapidly, and Q4’s growth rate decreased due to the influence of dual control. The rapid growth of the revenue side in 2021 is due to the upward capital expenditure of the manufacturing industry driven by the economic recovery in the first half of 2021, and the high prospect of new energy, prefabricated construction, chemical mixing, environmental protection and other industries; The growth rate of net profit was lower than that of revenue, because the price of raw materials rose sharply, the gross profit margin was 27.17%, down 1.16 PCT year-on-year, and the R & D investment of new businesses (construction machinery reducer, precision transmission, etc.) increased the expense rate. In Q4 of 2021, the single quarter revenue was 686 million yuan, yoy + 11%, and the net profit was 1.17 yuan, yoy-4%. The growth rate of revenue and profit was significantly lower than that in the first three quarters, which was due to the superposition of macroeconomic downturn and dual control, which affected the confidence of downstream enterprises in capital expenditure.
The epidemic affected the revenue recognition of Q1 in 2022, and the gross profit margin decreased due to intensified competition. The year-on-year decline of Q1 revenue end in 2022 is due to the reduction of logistics traffic efficiency due to the epidemic in the Yangtze River Delta in March, and some orders of the company cannot be delivered normally, which affects the revenue recognition of the current period. At the end of the first quarter, the inventory increased by 24% year-on-year, which also confirmed that the company had sufficient orders. The decline in the growth rate of net profit exceeded the growth rate of revenue, which was due to the decline in the prosperity of the industry, the pressure on the gross profit margin caused by price competition, the year-on-year decline of 1.18 PCT in Q1 gross profit margin, and the investment in new business.
Zeno (high-end reducer) and construction machinery reducer are expected to become new performance growth points. In 2021, Zeno achieved a revenue of 165 million, more than doubling compared with that before the acquisition, which is due to its large-scale development of the lithium battery slurry mixing reducer Market, and the sales of key customers such as Wuxi rose and Guangzhou Hongshang increased significantly. In addition, the company actively expanded production, and geno’s processing capacity and assembly capacity continued to improve, further eliminating capacity bottlenecks. In terms of construction machinery reducer, it has formed a series of rotation, walking, winch, concrete mixing and so on, which can be widely used in tower crane, excavator, mixer truck, rotary drill, electric forklift and other major construction machinery and equipment. It has established good cooperative relations with customers such as XCMG materials, XCMG Chongqing construction machinery and Henan Dongqi, laying a foundation for further improving the market share in the field of tower crane.
Investment suggestion: it is estimated that the revenue growth rate of the company from 2022 to 2024 will be 15%, 31% and 25% respectively, and the net profit growth rate will be 9%, 44% and 34% respectively, corresponding to PE 19x / 13X / 10x. The six-month target price is 26.75 yuan, corresponding to PE 25X valuation in 2022, and the investment rating of Buy-A will be given.
Risk tip: the macro economy continues to decline, global inflation continues to deteriorate, and the sales volume of new energy vehicles is lower than expected; The epidemic situation in the Yangtze River Delta has worsened.
