\u3000\u3 Guocheng Mining Co.Ltd(000688) 665 Cubic Sensor And Instrument Co.Ltd(688665) )
Event: on April 20, the company released its annual report for 2021. In 2021, the company realized an operating revenue of 547 million yuan, a year-on-year increase of 77.80%; The net profit attributable to the parent company was 180 million yuan, a year-on-year increase of 112.70%; The net profit deducted from non parent company was 173 million yuan, with a year-on-year increase of 114.23%. On April 28, the company released the first quarterly report of 2022. In 2022q1, the operating revenue was 135 million yuan, a year-on-year increase of 27.88%; The net profit attributable to the parent company was 43 million yuan, a year-on-year increase of 30.79%.
Rapid growth of revenue and improvement of market expansion and supply chain self-sufficiency: the company’s performance has increased significantly in the past 21 years, mainly due to the further increase of market share in the field of environmental electrical appliances represented by air purifiers and fresh air systems, and expanded to the fields of clean electrical appliances, kitchen electrical appliances, intelligent buildings and so on; The on-board sensor enters the output period; The sales revenue of medical and health gas sensors increased significantly, and expanded to new fields such as anesthesia machines and monitors. With the continuous expansion of air quality sensors in the international market, the revenue of foreign trade business increased by 119.99% year-on-year. According to the announcement, the company’s Q4 single quarter revenue was 169 million yuan, an increase of 31.37% year-on-year and 16.64% month on month; The net profit attributable to the parent company was 57 million yuan, an increase of 50.07% year-on-year and 16.25% month on month; On the other hand, by expanding the self-produced rate of key parts and components, the company has continuously enriched the self-produced types of parts and components to improve product quality and efficiency. In 21 years, the gross profit margin increased to 50.93% (+ 3.77pct), the profit growth rate was higher than the revenue, and also controlled its sales and management expenses on the expense side. 22q1 under the pressure of the macroeconomic environment and the impact of the epidemic, the company achieved rapid growth in revenue and profit and excellent performance.
The expansion of downstream demand drives the continuous growth of performance: the application field of the company’s products continues to expand, and the downstream demand is strong. According to the announcement, the company’s civil air quality sensor products expanded from monitoring CO2, dust, formaldehyde, VOC and radon to soot concentration and turbidity, the product type expanded from sensors to controllers, and the downstream application fields expanded from environmental appliances to clean appliances, kitchen appliances, smart buildings, atmospheric environmental protection monitoring, clean rooms and other application fields, of which the CO2 gas sensor increased by 256.78% year-on-year. The company’s medical and health gas sensor product line has been further extended, and now it has expanded to cover many fields, such as ventilator, oxygen generator, high flow oxygen therapy instrument, anesthesia machine, monitor, diffuse lung function instrument, cardiopulmonary analyzer and sectorau diffuse oxygen concentration monitoring. Among them, ultrasonic oxygen sensor for ventilator and oxygen generator has driven the company’s sales revenue in the medical and health field to increase by 128.70% year-on-year. The gas sensor product line of automobile comfort system extends from vehicle air quality sensor to vehicle air quality improvement device, from monitoring CO2, dust, formaldehyde and VOC to anion, plasma and fragrance generator, and further improves the value contribution and industry threshold of single vehicle through functional integration. By the end of the 21st century, the number of fixed-point sensors of the company’s on-board sensor project had accumulated about 10 million, and the sales revenue increased by 139.94% year-on-year. According to the announcement on April 21, the company recently received two fixed-point notices from Chinese OEMs to provide customized development and supply services for automotive comfort system sensors, with a total amount of about 125 million yuan. The smooth delivery of fixed-point projects in the future is expected to contribute more performance growth to the company.
Seize opportunities in multi field layout and continuously expand the growth space: China’s ultrasonic gas meter standard has been implemented in October 2021, and ultrasonic gas meters usher in a broad market space. According to the announcement, the ultrasonic gas meter module and complete machine production line of the company have realized the self-production of ultrasonic gas meter probe. The raised investment project of Jiashan Industrial Park has completed the capping of the main project at the end of the reporting period, and the raised investment project is about to release production capacity. Under the trend of domestic substitution of ultrasonic gas meters, the company’s ultrasonic gas meter business is expected to achieve large-scale growth. With the gradual implementation of the double carbon policy and the implementation of the national six standards, the front and rear installation markets of O2 and NOx sensors continue to expand. According to the announcement, the company has built O2 and NOx sensor component chips and sensor packaging production lines, and relevant products will be promoted rapidly. With the introduction of lithium battery thermal runaway warning standard, the importance of on-board safety has become increasingly prominent. The company continues to expand the field of on-board safety, and the market space of thermal runaway sensor is expected to be further opened.
Investment suggestion: the company is the leader of gas sensors. With the continuous improvement of market scale and localization rate, we expect the company’s revenue from 2022 to 2024 to be 839 million yuan, 1.209 billion yuan and 1.479 billion yuan respectively, the net profit attributable to the parent company to be 270 million yuan, 385 million yuan and 466 million yuan respectively, and the EPS to be 386 million yuan, 549 million yuan and 666 yuan respectively, corresponding to 28 times, 20 times and 16 times of PE respectively, maintaining the “Buy-A” investment rating.
Risk warning: the risk of seasonal fluctuation of income; Risk of product quality control; Risk of exchange rate fluctuation; The risk of intensified market competition; Risk of MCU and other electronic components procurement; Covid-19 is at risk of persistent pneumonia.
