\u3000\u30003 Zhejiang Jinfei Kaida Wheel Co.Ltd(002863) 00286)
Profit growth slowed down due to the epidemic, and the follow-up rush is expected to promote the recovery and growth of performance. The company achieved revenue of 210 million yuan in 2022q1, an increase of 3.4% at the same time; The net profit attributable to the parent company was 31.53 million yuan, an increase of 2.3% at the same time, in line with expectations; The net profit attributable to the parent company after deducting non profits was 29.03 million yuan, which was basically the same year-on-year. Since March, due to the impact of the epidemic, the logistics is not smooth, the receipt of raw materials and product delivery have been significantly blocked, and the revenue recognition has slowed down; At the same time, the tax return received in the first quarter was 2.2 million less than that in the same period last year (it is expected that it was not fully collected due to the epidemic). If the tax return factor is excluded, the net profit attributable to the parent company in Q1 will increase by about 13%. On the whole, the epidemic in the first quarter restricted the growth of the company’s revenue performance. If the subsequent epidemic in China is successfully controlled, the company is expected to promote the recovery of revenue performance through rush work. At present, the company focuses on increasing the laying of sales channels, continuously improving the network layout of direct sales team, and vigorously developing dealers and online sales channels; At the same time, actively promote the iterative upgrading of products. It is expected that this year, the company will accelerate the extension of product solutions from the field of substation automation to the field of comprehensive energy efficiency management and fire protection, promote the continuous improvement of customer unit price and order volume, and strengthen the driving force of profit growth.
The gross profit margin rebounded and the cash outflow increased due to the active reserve of raw materials. The gross profit margin of 2022q1 company is 45.3%, yoy + 0.5 PCT, and the gross profit margin is basically the same. During the period, the expense rate was 32.2%, yoy + 0.8 PCT, of which the sales / management / R & D / financial expense rate was yoy-2.0 / + 0.9 / + 1.9 / + 0.01 PCT. The decrease in the sales expense rate is expected to be mainly due to the decrease in the travel and other expenses of sales personnel under the epidemic situation; The increase of R & D expense rate is mainly due to the company’s continuous emphasis on product R & D and the increase of relevant investment. Q1 no provision for impairment loss of assets (including credit) was made, and there was no change year-on-year. The income tax rate is 7.8%, yoy-4.7 PCT, which is mainly due to the decrease of the accrued income tax due to the fact that the R & D expenses in this period are charged before tax at 100% and charged before tax at 75% in the same period last year. The net interest rate attributable to the parent company is 15.2%, yoy-0.2 PCT. The net cash flow from operating activities was about 62 million yuan, compared with 15 million yuan in the same period last year. The increase in cash flow outflow was mainly due to the increase in the company’s expenditure on reserve raw materials and the increase in the margin of acceptance bills used to pay for goods. The cash to cash ratio and cash to pay ratio are 107% and 167% respectively, and yoy + 9 / + 68 PCTs.
Actively repurchased shares, continued to promote employee stock ownership and encourage core backbone. The company announced that based on the confidence and value recognition of the chairman and general manager in the future development prospects, and in order to further establish and improve the long-term incentive mechanism and fully mobilize the enthusiasm of the company’s senior executives and core backbone, the company proposes to repurchase shares of 50 million to 100 million yuan for equity incentive or employee stock ownership plan, and the repurchase price shall not exceed 20 yuan / share. Recently, the company announced the fourth phase of the employee stock ownership plan (Draft), which plans to grant 3.17 million shares of the company (from the shares repurchased last year) to no more than 107 core backbones, accounting for 1.48% of the total share capital of the company. The grant price is 10 yuan / share, and the assessment target is that the revenue growth rate in 2023 / 2024 is no less than 15% / 35% compared with that in 2022. The company has issued an employee stock ownership plan for three consecutive years, continuously increasing the proportion of employee stock ownership, deeply binding the core backbone interests, improving innovation vitality and promoting the sustainable growth of the company.
Investment suggestion: we expect the company to realize net profit attributable to parent company of RMB 230 / 3.1 / 420 million from 2022 to 2024, with a year-on-year increase of 35% / 35% / 34%, EPS of RMB 107 / 1.45/1.94 respectively (CAGR of 20212024 is 35%), and the corresponding PE of current stock price is 17 / 13 / 9 times respectively, maintaining the “buy” rating.
Risk warning: the impact of the epidemic exceeds the expected risk, the risk of bad debts of accounts receivable, the risk of depreciation of fixed assets, the risk that the implementation of share repurchase and incentive plan is less than the expected risk, etc.
