\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 25 Iat Automobile Technology Co.Ltd(300825) )
On April 27, the company released the first quarterly report of 2022. In 2022q1, the company achieved an operating revenue of 212 million yuan, a year-on-year increase of 4.92%. The net profit attributable to the parent company was 259756 million yuan, a year-on-year decrease of 35.44%. The net profit attributable to the parent company after deducting non recurring profits and losses was 256002 million yuan, a year-on-year decrease of 34.00%. The decline of net profit in 2022q1 is mainly due to the continuous development of fund-raising projects and the increase of R & D project investment. According to the company’s announcement, the company’s R & D expenditure in 2022q1 was 328178 million yuan, a year-on-year increase of 174442 million yuan. The R & D expense ratio was 15.51%, with a year-on-year increase of about 7.89 PCT.
The whole vehicle design is in hand, and the orders are full. The epidemic has dragged down the revenue confirmation of some orders. The company has many abilities such as vehicle R & D, model modification and platform development, and can develop models for different scenarios for customers outside China. According to the company’s announcement, as of April 2022, the company’s stock of R & D business orders totaled 1.848 billion yuan, with abundant orders on hand. As an independent design leader in China, the company has customers all over North China, East China, South China and other places. Under the influence of the first quarter epidemic, the acceptance time of some orders of the company was delayed and the negotiation progress of potential orders slowed down, which delayed the confirmation of some revenue. However, with the resumption of work and production of vehicle enterprises, the acceptance progress and signing progress of the company are expected to recover gradually.
Powertrain parts were delivered one after another, and the ramp up of mass production led to the continuous improvement of gross profit margin. In recent years, the company has actively expanded the core parts business of powertrain, broadened the source of revenue, and successively obtained orders for Shangtong Wuling DHT gearbox, Honda reducer, Continental German reducer, BAIC V6 engine and so on. According to the company’s announcement, Honda’s reducer has begun mass production and supply. The reducer and Shangtong Wuling DHT gearbox for mainland Germany have completed sample development and trial production test, and are expected to be delivered gradually in 2022.
Actively explore the ODM mode of the whole vehicle and get through the whole process of design development production manufacturing. From the entry of the skateboard chassis to the proposed transfer of 80.1% equity of Tianjin Bojun through equity transfer, the company looks forward to the reform of the separation of the upper and lower body of the car and actively explores the ODM mode of the whole car. We believe that with the technology and human resources accumulated in the vehicle design business, the company is expected to open up the whole process from design and development to vehicle design and further consolidate its leading position in independent design.
Investment suggestion: with the continuous exploration of the company in ODM and other forward-looking models, it is expected to further integrate the existing design and manufacturing resources and seize the new air outlet of electric intelligence. Considering the impact of the current epidemic on the delivery of the company’s existing orders and the negotiation of potential orders, we lowered the company’s profit forecast for 20222024 and gave a net profit of 290 million yuan (original value of 324 million yuan), 397 million yuan (original value of 501 million yuan) and 526 million yuan respectively. Based on the closing price on April 27, 2022, the current market value of the company is 5.580 billion yuan, corresponding to 19.2x, 14.0x and 10.6x PE from 2022 to 2024, maintaining the “buy” rating.
Risks of lower than expected progress of ODM investment and integration projects, and lower than expected progress of ODM investment.
