Dingyang Technology (688112)
On April 28, dingyang technology disclosed the first quarter report of 2022. In the first quarter of 2022, the company achieved an operating revenue of 67.911 million yuan, a year-on-year increase of 3.96%, and a net profit attributable to the parent company of 2004.7 million yuan, a year-on-year increase of 6.59%; The net profit deducted from non parent company was 18.566 million yuan, with a year-on-year increase of 1.07%.
The demand side continues to be booming, the delivery is affected, and the performance is under pressure in the short term
In the first quarter of 2022, the company achieved an operating revenue of 67.911 million yuan, a year-on-year increase of 3.96%; The net profit attributable to the parent company was RMB 2004.7 million, with a year-on-year increase of 6.59%. The growth rate of both showed a certain degree of decline, mainly due to the impact of shipment on the supply side of the company, including the shortage of chip supply, domestic and foreign epidemics, etc. From the demand side, the amount of orders received by the company in the first quarter of 2022 increased by about 36% year-on-year, of which the amount of orders received in domestic and overseas markets increased by about 35% and 36% year-on-year respectively, still reflecting a high prosperity. We expect that with the core shortage and the mitigation of the impact of the epidemic, the overall growth rate of the company is still expected to rebound to the level matching the order side. In addition, the company's Q1 gross profit margin was 55.54%, a slight decline over the same period last year, mainly due to the rise in the price of upstream raw materials. At the same time, the continuous volume of high-end products brought a certain increase in gross profit margin, which offset some of the impact.
Oscilloscope and frequency domain new products continue to be introduced, and the momentum of high-end and localization remains unchanged
In the first quarter of 2022, the company benefited from localization, new product introduction and high-end indicators, and the three major trends accelerated. 1) Medium and high-end products still maintain a high growth rate. The company's revenue of product series with an average sales unit price of more than 10000 / 30000 / 50000 yuan in 2022q1 increased by 35% / 296% / 479% year-on-year, significantly higher than the overall level, and the revenue structure was further optimized. 2) The introduction of new products is accelerated, and the frequency domain side is particularly bright. The revenue of sds6000 series oscilloscope released by the company in 2020 increased by 104% year-on-year; The revenue of spectrum analyzer / RF microwave signal generator / arbitrary waveform generator ssa5000 / ssg5000 / sdg7000 launched in 2021 increased by 181% year-on-year; The revenue of vector network analyzer sna5000x / sva1000x increased by 60% year-on-year. Considering that the sales of electronic measuring instruments requires prototype evaluation and trial, and there is a certain cycle from product launch to sales volume, we believe that the new products are expected to maintain the current momentum in the next two years and bring greater performance contribution to the company. 3) Under the localization bonus, the downstream demand of the Chinese market increased. In 2022q1, the operating revenue of the domestic market of the company's product series with an average sales unit price of more than 10000 yuan increased by 59.31% year-on-year, significantly higher than 23.52% in the overseas market. We believe that the company is expected to benefit from the dividends brought by the localization of basic tool chain and the upgrading of industrial chain for a long time and continue to make efforts in the Chinese market.
The wave of localization of basic tool chain has started, and it is optimistic that the improvement of supply capacity will drive the continuous high growth of performance. At present, the key technology of the neck is gradually extended to the upstream basic tool chain. From the two sessions at the beginning of the 21st century to the conference of academicians of the two academies in the middle of the year, from the 730 meeting of the Political Bureau to the central economic work conference at the end of the year, the national high-level has always repeatedly emphasized the self-reliance and self-improvement of science and technology, accelerated the solution of the "neck" problem and developed specialized and special new enterprises. We believe that the wave of localization 3.0 focusing on the software and hardware of the basic tool chain has started. As a leading enterprise of electronic measuring instruments in China, the company is expected to benefit from the dividends brought by the localization of the basic tool chain and the upgrading of the industrial chain for a long time. Compared with the demand side, we believe that the market should pay more attention to the improvement of the company's ability on the supply side. 1) In terms of products, in the recent year, the company has successively released a number of high-end new products, and disclosed in detail the future product R & D roadmap in the prospectus. It is expected that the company will continue to break through medium and high-end products through technological innovation and improve the value and gross profit margin of single products. 2) In terms of channels, while consolidating the advantages of European and American markets, we are optimistic that the company will actively grasp the opportunities brought by domestic substitution and strengthen the expansion of the Chinese market. At present, the company has established a professional sales team in China to explore channels, focusing on increasing promotion efforts in modern electronic information industry intensive areas such as the Yangtze River Delta, the Pearl River Delta, Beijing, Tianjin and Hebei. It is expected that with the company's continuous efforts in products and channels, the company's revenue in China is expected to accelerate compared with 2021.
Investment suggestion: as a leading enterprise of electronic measuring instruments in China, dingyang technology has benefited from the dividends brought by the localization of basic tool chain and the upgrading of industrial chain for a long time while expanding the application of downstream industries. Through technological innovation, we will continue to break through medium and high-end products, improve the value volume and gross profit margin of single products, strengthen the building of self-developed brands and the comprehensive upgrading of Chinese channels, and are expected to realize the simultaneous rise of volume and price in the future. We expect the company to achieve operating revenue of RMB 435 / 657 / 998 million from 2022 to 2024 respectively; The net profit attributable to the parent company was 121 / 185 / 289 million yuan respectively, maintaining the "Buy-A" rating. Considering the company's short-term growth and long-term industry space, a six-month target price of 67.68 yuan / share is given, which is equivalent to 60 times the dynamic P / E ratio in 2022.
Risk tips: 1) technology R & D breakthrough is less than expected; 2) Policy support is less than expected; 3) Downstream demand is lower than expected; 4) Loss of core technical personnel.
