\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 699 Ningbo Joyson Electronic Corp(600699) )
The company issued the annual report of 2021 and the first quarterly report of 2022. In 2021, the company realized a total operating revenue of 45.67 billion yuan (- 4.6%), and a net loss attributable to the parent company of 3.75 billion yuan (- 709.1%); The net loss per share is 2.74 yuan; In 2022, Q1 achieved a total operating revenue of 11.73 billion yuan (- 4.5%), and a net loss attributable to the parent company of 160 million yuan (- 171.3%), which was lower than expected. The company has multi-point layout in the fields of intelligent cockpit, intelligent driving and new energy, and the orders are in good condition; The short-term income and gross profit margin of automobile safety business are under pressure, and it is expected to improve gradually in the follow-up. We expect the company’s earnings per share from 2022 to 2024 to be 0.35 yuan, 0.71 yuan and 1.11 yuan respectively, maintaining the buy rating.
Key points supporting rating
The income decreased slightly and the performance was under pressure in the short term. Affected by the global epidemic, chip shortage and exchange rate fluctuations, the company’s revenue decreased by 4.6% in 2021, including 32.31 billion yuan (- 2.5%) for automotive safety and 12.71 billion yuan (+ 24.0%) for automotive electronics. The mass production and revenue growth of new projects led to the increase of automobile electronics gross profit margin by 1.6pct. However, affected by the rise of raw materials and transportation costs, the automobile safety gross profit margin decreased by 2.8pct, resulting in the overall gross profit margin of the whole year decreased by 1.7pct. Sales expenses increased by 31.4%, mainly due to the provision of quality assurance deposit for specific customers and projects; Management expenses decreased by 9.9%, mainly due to the reduction of 210 million yuan in restructuring expenses; R & D expenses increased by 2.0% and financial expenses decreased by 9.4%; The four expense rates of the whole year increased by 0.6pct year-on-year, plus the provision for goodwill impairment of 2.02 billion yuan, the investment income decreased by 1.64 billion yuan, and the annual net loss attributable to the parent company was 3.75 billion yuan. 21q4 achieved a revenue of 11.56 billion yuan (- 17.5%), with a year-on-year decrease in gross profit margin of 1.8pct. Coupled with the impact of expense growth and goodwill provision, the net loss attributable to the parent company was 3.77 billion yuan. 22q1 company achieved a revenue of 11.73 billion yuan (- 4.5%), the gross profit margin decreased by 4.6pct year-on-year and increased by 4.0pct month on month. The restructuring expenses resulted in a net loss of 160 million yuan (- 171.3%), and the performance was lower than expected.
The multi-point layout of automotive electronics is promising in the future. In 2021, the company’s automotive electronics business realized a revenue of 12.71 billion yuan (+ 24.0%), including 10.61 billion yuan for intelligent cockpit / Internet connection system and about 2.1 billion yuan for new energy business. In the field of intelligent cockpit, the company has signed a strategic cooperation agreement with Huawei, and the first cooperative product is expected to be mass produced by the end of the year; A Research Institute for intelligent driving has been established. L0-l4 products have relatively mature solutions, and will be fixed-point and mass produced in 2022; New energy promotes the development of electronic control modules and other products. The company’s intelligent and electric products go hand in hand. In 2021, the order will be 30.8 billion yuan, and the future development is promising.
Automobile safety is under pressure in the short term and is expected to be improved in the future. In 2021, affected by the global epidemic and chip shortage, the revenue of automobile safety business declined; The increase in the price of raw materials and freight has reduced the gross profit by about 950 million yuan, and the gross profit margin is under pressure in the short term. In 2021, the automobile safety business will receive 21.8 billion yuan of orders, the subsequent chip shortage and the epidemic situation will be alleviated, and the revenue is expected to gradually rise; Raw materials and freight are expected to decline in the follow-up, and share the pressure with upstream and downstream. Combined with the impact of global restructuring and optimization, the gross profit margin is expected to stabilize and recover, helping the company’s performance growth.
Valuation
Considering the impact of the epidemic and raw materials, we adjusted the profit forecast. It is expected that the earnings per share of the company in 20222024 will be 0.35 yuan, 0.71 yuan and 1.11 yuan respectively, maintaining the buy rating.
Main risks of rating
1) the automobile sales volume is lower than expected; 2) The development of safety business integration and automotive electronics was less than expected.
