\u3000\u3 Shengda Resources Co.Ltd(000603) 348 Wencan Group Co.Ltd(603348) )
Events
The company released the first quarterly report of 2022. In 2022q1, the company achieved a revenue of 1.243 billion yuan, a year-on-year increase of + 18.4%; The net profit attributable to the parent company was 80 million yuan, a year-on-year increase of + 58.3%.
Key investment points
Revenue: Bailian is stable, and the headquarters has high growth
22q1 company's revenue was 1.24 billion yuan, with a year-on-year increase of 18.4%, of which the growth rate of Bailian / headquarters was + 7 / + 33.6% respectively. The main production capacity of Bailian is in Europe. Under the influence of the conflict between Russia and Ukraine, the revenue is still growing and has strong toughness. The revenue of Wencan headquarters has achieved high growth under the support of incremental orders / sales growth of new energy vehicles / Volkswagen recovery.
Profit: Bailian maintained a high operating quality, and the profit recovery of the headquarters was obvious. The performance in the first quarter exceeded the expectation. The company's Q1 gross profit margin was 19.4%, year-on-year -1.63pct, and continued to improve compared with 21q4 + 0.55pct, mainly due to the increase of production and marketing scale + the decrease of aluminum price + the price adjustment of customers. Under the growth of Q1 revenue, the expense rate was diluted. During 22q1, the expense rate decreased by 3PCT year-on-year, so the net interest rate increased by 1.6pct, and the profit increased by + 58% year-on-year, which was higher than the growth of revenue. It is expected that the net interest rate of Bailian Q1 will reach 6% and maintain the consistent operation quality. Although the prices of natural gas and aluminum in Europe have increased under the conflict between Russia and Ukraine, the price adjustment of customers is smooth and there is an agreement to lock the price with natural gas suppliers. The business structure of the headquarters was further optimized + Volkswagen recovered, and Nantong Factory Tianjin factory was profitable. In the second half of the year, with several important new projects put into operation, the company's gross profit margin is expected to gradually recover, and the overall profitability still has room for improvement.
The industrialization process of integrated die casting is accelerated, and the company is optimistic about customer development
The integrated die-casting process was initiated by Tesla, which has the advantages of cost reduction (streamlining the production process chain), lightweight and rapid improvement of production efficiency. Under the demonstration of Tesla, the whole industry is setting off an integrated die-casting process revolution. In 21 years, only Tesla mass production and Weilai want to follow up clearly. In 22 years, Xiaopeng, Gaohe, SAIC Zhiji, Huawei, Xiaomi, Ford and Volkswagen are expected to follow up one after another, and the market will expand rapidly, Potential 100 billion market. In 21 years, the product only has the rear seat sector, and in 22 years, the process will be extended to the field of front compartment and battery tray. The integrated die casting process is a systematic barrier, and only the product links have systematic ability, which is reflected in the demand for materials, equipment and molds and the comprehensive control ability. In essence, the integrated body is a larger and more integrated body part. Wencan is the absolute leader in the field of aluminum die-casting body parts in China. In 2011, the layout was led by Mercedes Benz. It has supplied many high-end brands in 10 years and accumulated rich process experience. From the verification of the order results, the company is ahead of its global counterparts and has obtained many new forces' integrated orders. We judge that the company will become the leader of integrated die-casting body parts with the advantages of 10 years of large-scale aluminum die-casting body parts and rapid layout. Recently, the trial production of 9000t integrated rear seat sector was successful (a designated project last year). At the same time, the company plans to purchase 9 large die-casting machines from Lijin technology, including 270000t. The number of large die-casting machines above 6000t in place and planned to be purchased by the company is 6, with sufficient orders on hand.
Profit and valuation forecast
The company is the leader of large-scale aluminum die-casting body parts in China. With Tesla leading the whole industry to set off an integrated die-casting process revolution, the company is expected to become the leader in the integrated die-casting field. At the same time, the company's product line has undergone important changes since 2020, adding chassis, big three electricity and battery tray / energy storage box products to fully embrace new energy and open growth. It is estimated that the net profit attributable to the parent company in 22-24 years will be 280 / 6 / 780 million yuan, with a growth rate of 192.3% / 110.7% / 30.8%, corresponding to the current pe32x / 15x / 12x times, maintaining the "buy" rating.
Risk tips: the recovery of the epidemic is not as expected, the conflict between Russia and Ukraine affects overseas production and marketing and costs, and the rise of aluminum price
