\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 885 Hongfa Technology Co.Ltd(600885) )
The company released the annual report of 2021 and the first quarterly report of 2022, with a year-on-year profit of + 28% / + 21%. The operation of the company is steady, the growth rate of HVDC business is bright, and other businesses basically maintain rapid growth; Maintain the overweight rating.
Key points supporting rating
In 2021, the non-profit growth was deducted by 33%, and in 2022q1, the profit increased by 21%. The company released the annual report of 2021, and the annual operating revenue was 10.023 billion yuan, an increase of 28.18% year-on-year; The net profit attributable to shareholders of listed companies was 1.063 billion yuan, a year-on-year increase of 27.69%; The non-profit after deduction was 923 million yuan, a year-on-year increase of 32.98%. The company also released the first quarterly report of 2022, achieving a profit of 279 million yuan, a year-on-year increase of 20.78%, deducting non-profit of 252 million yuan, a year-on-year increase of 20.66%.
Beautiful operating cash flow: in 2021, the company’s net operating cash flow was 912 million yuan, a year-on-year increase of 26.72%; 2022q1 turned positive to 294 million yuan year-on-year, reflecting high income quality.
The rise in the price of raw materials suppressed the gross profit margin and slightly warmed up in 2022q1: affected by the rise in the price of raw materials and other factors, the cost of relay materials increased by 42.55% in 2021, the comprehensive gross profit margin decreased by 2.37 percentage points to 34.58% year-on-year, and the comprehensive gross profit margin increased by 0.72 percentage points to 33.49% month on month in 2022q1.
High speed growth of HVDC relay delivery: the company’s HVDC products have established an obvious leading position in the global competitive landscape, and has basically established business cooperation relations with Tesla, GM, Volkswagen, Mercedes Benz, BMW, Audi and other global mainstream new energy vehicle manufacturers. In 2021, the global market share increased from 25% to 36%. In 2021, the company shipped 1.46 billion yuan of high-voltage DC relays, a year-on-year increase of 147%; 2022q1 shipments increased by 127% year-on-year to 638 million yuan, and benchmark customers outside China achieved higher than expected growth. In addition, the shipment of the company’s signal relay in 2021 increased by 43.2% year-on-year to 520 million yuan, and remarkable results were achieved in the optimization of market layout and customer structure.
Power, automotive relays and other products maintained rapid growth: in 2021, the company delivered 3.5 billion yuan / 1.521 billion yuan of power / automotive relays respectively, with an average year-on-year increase of 30%, maintaining a good momentum as a whole. The delivery of power relays decreased by 8% year-on-year to 1.4 billion yuan.
Valuation
Under the current share capital, we adjusted the company’s predicted earnings per share from 2022 to 2024 to 1.84/2.36/2.98 yuan (the original predicted earnings per share from 2022 to 2023 was 1.90/2.30 yuan), corresponding to a P / E ratio of 21.6/16.9/13.4 times; Maintain the overweight rating.
Main risks of rating
The impact of the epidemic exceeded expectations; Downstream demand is lower than expected; Adverse changes in overseas market environment; Exchange rate fluctuations; The progress of new business development did not meet expectations.
