\u3000\u3 China Vanke Co.Ltd(000002) 475 Luxshare Precision Industry Co.Ltd(002475) )
Matters:
The company released its annual report for 2021. In 2021, the company achieved a revenue of 153946 billion yuan (66.43% YoY) and a net profit attributable to shareholders of listed companies of 7.071 billion yuan (- 2.14% YoY). The company plans to distribute a cash dividend of 1.10 yuan (including tax) to all shareholders for every 10 shares.
Ping An View:
The performance is in line with expectations and the horizontal expansion of products is progressing smoothly: in 2021, the company achieved a revenue of 153946 billion yuan (66.43% YoY) and a net profit attributable to shareholders of listed companies of 7.071 billion yuan (- 2.14% YoY). In 2021, the company’s overall gross profit margin and net profit margin were 12.28% (- 5.81pctyoy) and 5.08% (- 3.02pctyoy) respectively. The decline in the company’s gross profit margin was mainly due to the large resource investment in the early development of the company’s acquired Likai precision products, the high proportion of materials in the product cost structure, the relatively low gross profit margin, and the company’s performance basically met the expectations. In terms of business, the revenue of consumer electronics, computers, automobiles and communication products in 21 years was 134638 billion yuan (64.56% YoY), 7.857 billion yuan (123.11% YoY), 4.143 billion yuan (45.66% YoY) and 3.269 billion yuan (44.32% YoY), accounting for 87.46%, 5.10%, 2.69% and 2.12% respectively. All businesses are progressing smoothly, and intelligent modules continue to realize cross product and cross domain applications; The system packaging process is successfully mass produced, and the product penetration and application scope are expected to continue to improve in the future; New and old products of smart wearable and mobile phone assembly business are progressing as planned. Expense side: in 2021, the company’s financial expense rate, sales expense rate, management expense rate and R & D expense rate were 0.36% (- 0.62pctyoy), 0.51% (- 0.01pctyoy), 2.43% (- 0.23pctyoy) and 4.31% (- 1.9pctyoy) respectively, and the expense rate was relatively stable as a whole. The company’s product layout covers parts, modules and system assembly products, has a relatively complete vertical integration self-made ability, and has closed-loop management from key materials, parts, modules, core processes and data at all stages.
The platform has significant advantages and goes hand in hand in many fields: in terms of product layout, the company has developed from a single manufacturer of connecting products in the consumer electronics market to a science and technology-based manufacturing enterprise comprehensively covering diversified components, modules and accessories such as connecting wires, connectors, acoustics, antennas, wireless charging and vibrating motors. While consolidating and enhancing its leading position in the consumer electronics industry, the company actively distributes emerging high-quality fields such as communication and automobile. In the automotive field, the company focuses on the “blood vessel and nervous system” of the whole vehicle. The specific products include the whole vehicle harness, special harness, high-voltage harness and connector of new energy vehicle, intelligent electrical box, RSU (roadside unit), on-board communication unit (TCU) and central gateway. In the field of communication and data center, the company has deeply covered products including high-speed interconnection, optical module, heat dissipation module, base station antenna, base station filter and so on. Through the development of technology deep cultivation and the integration of industry, University and research, the company has achieved global leadership in some subdivided fields. Through the two-line strategy of complete machine + core parts, the company lays the foundation for providing customers with one-stop service in an all-round way and provides strong support for the long-term development in the next 5-10 years. The company introduces digital model, connects production and data flow through modeling method, and deeply excavates the information and trend behind digital through the application of big data, cloud computing, artificial intelligence, digital twin and other technologies, so as to evolve to manufacturing intelligence.
Investment strategy: While consolidating and strengthening its leading position in the consumer electronics industry, the company actively distributes emerging high-quality fields such as communication and automobile, and develops into a science and technology-based manufacturing enterprise comprehensively covering diversified components, modules and accessories such as connectors, acoustics, antennas, wireless charging and vibrating motors. Considering the slowdown in the sales growth of mobile phones and TWS headphones, we lowered the company’s profit forecast for 22 / 23 years and added a 24-year profit forecast. It is estimated that the company’s net profit attributable to the parent company from 2022 to 2024 will be RMB 99.07/134.4415922 billion (the original value in 22 / 23 is 109.09/141.81), and the corresponding PE will be 20 / 15 / 12 times respectively, maintaining the company’s “recommended” rating.
Risk tips: 1) risk of exchange rate fluctuation: part of the company’s main business is sold abroad and calculated in foreign currency, and exchange rate fluctuation will have a certain impact on its financial expenses. 2) The epidemic spread exceeded expectations: if the epidemic spread exceeded expectations in the future, it will have a great impact on the resumption of work of some companies and have a certain impact on industrial chain companies. 3) Risk that the growth rate of downstream application fields is lower than expected: the company’s downstream application fields include consumer electronics, automobiles, etc. when there are macroeconomic fluctuations, the lower growth rate of downstream application fields will have a certain impact on the company’s performance. 4) Risk of uncertain trend of Sino US trade friction: if the trade friction between China and the United States worsens further, it will have a certain impact on industrial chain companies
