\u3000\u30003 Shenke Slide Bearing Corporation(002633) 00263)
Event: the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved an operating revenue of 2.209 billion yuan, a year-on-year increase of 21.1%, and a net profit attributable to the parent company of 291 million yuan, a year-on-year increase of 30.88%. In the first quarter of 2022, the company achieved an operating revenue of 571 million yuan, a year-on-year increase of 49.28%; The net profit attributable to the parent company was 65.7 million yuan, a year-on-year increase of 19.14%.
The performance will grow rapidly in 2021. In 2021, the company’s stock and incremental business went hand in hand, and the revenue and net profit attributable to the parent company achieved a year-on-year rapid growth of 21.1% and 30.88% respectively. In the new electronic materials sector, as a new growth point, the market share of wide range molybdenum target and high-end ITO target has increased significantly; In the polymer composite material sector, kebosi has made breakthroughs in the market promotion of new track products, Haiwei Composite Marine large and medium-sized structures and structural function products have achieved rapid growth, and the technical transformation and intelligent manufacturing construction of zhaoheng technology have been basically completed, doubling the production capacity; In the traditional business sector of energy conservation and environmental protection, the market share and profitability of the company continued to improve.
The financial performance of 2022q1 convertible bonds still exceeds the expected growth. In 2022q1, the company’s revenue and net profit attributable to the parent company achieved 49.28% and 19.14% higher than expected growth respectively, and the sales and management expense ratio decreased by 3.1pct compared with the same period last year. The financial expense of 2022q1 company was 16.67 million yuan, with a year-on-year increase of 304.18%, mainly due to the recognition of convertible bond interest at the bond market interest rate without convertible bonds, which is higher than the face rate of convertible bonds; The 799 million yuan convertible bonds previously issued by the company were listed in August 2021, with a coupon rate of 0.4% in the first year. On April 26, 2022, the company deliberated and decided to use idle self owned funds for entrusted financial management with a total amount of no more than 500 million yuan, which is expected to reduce the impact of financial expenses of convertible bonds on the company’s performance.
ITO target has obtained Longji certification and plans to introduce Huaxi Group to increase capital and shares of Jinglian optoelectronics. The subsidiary Jinglian optoelectronics focuses on the R & D and production of ceramic ITO targets. In 2021, its special proportion photovoltaic targets have passed the certification of Longji and other customers. In addition, the company reviewed on April 26, 2022 and proposed to introduce Huaxi Group to increase capital and shares of its subsidiary Jinglian optoelectronics. The indium reserves of Huaxi Group rank first in the world, and tin, zinc and antimony rank first in China. It is the largest beneficiation base of tin polymetallic ore in Asia. Previously, the company had reached strategic cooperation with Huaxi Group to deeply bind the core resource of upstream heterojunction metal indium. The introduction of Huaxi Group, the two sides make every effort to build the whole industrial chain of photovoltaic heterojunction ITO targets, which is expected to promote the market share of Jinglian optoelectronics.
Profit forecast, valuation and rating: Longhua Technology Group(Luoyang)Co.Ltd(300263) is a new material platform company with great growth. Driven by the release of new material capacity of wind power blades and the wave of industrialization of photovoltaic heterostructures, its performance is expected to achieve rapid growth in the future. We maintain the forecast of the company’s net profit attributable to the parent company from 2022 to 2023 of 403 million and 549 million yuan, and increase the forecast of net profit attributable to the parent company in 2024 of 715 million yuan. The corresponding EPS from 2022 to 2024 are 0.44, 0.60 and 0.78 yuan respectively, and the corresponding PE are 14x, 10x and 8x respectively. Maintain the “buy” rating.
Risk warning: industry competition intensifies the risk; The progress of wind power blade new material raising and investment project is less than expected; The industrialization of photovoltaic heterojunction is less than expected.
