\u3000\u3 Shengda Resources Co.Ltd(000603) 308 Anhui Yingliu Electromechanical Co.Ltd(603308) )
Event: the company released its annual report for 2021 on April 27. In 2021, the company achieved an operating revenue of 2.040 billion yuan, a year-on-year increase of 11.29%, a net profit attributable to the parent company of 231 million yuan, a year-on-year increase of 14.67%, and a net profit deducted from non attributable to the parent company of 150 million yuan, a year-on-year increase of 4.62%. The company released the first quarterly report of 2022 on April 27. In 2022q1, the company achieved a revenue of 523 million yuan, a year-on-year increase of 14.29%, a net profit attributable to the parent company of 66 million yuan, a year-on-year increase of 10.06%, and a deduction of non attributable net profit of 47 million yuan, a year-on-year increase of 11.88%.
The performance grew steadily, and the rise in the price of upstream raw materials suppressed profitability in the short term. On the revenue side, the company achieved an operating revenue of 2.04 billion yuan in 2021, with a year-on-year increase of 11.29%; In 2022q1, the company achieved a revenue of 523 million yuan, a year-on-year increase of 14.29%, and the company’s revenue grew steadily. On the profit side, the company realized a net profit attributable to the parent company of 231 million yuan in 2022, with a year-on-year increase of 14.67%, and deducted a net profit not attributable to the parent company of 150 million yuan, with a year-on-year increase of 4.62%; In 2022q1, the company realized a net profit attributable to the parent company of 66 million yuan, with a year-on-year increase of 10.06%, and deducted a net profit not attributable to the parent company of 468 million yuan, with a year-on-year increase of 11.88%. The profit side of the company also grew steadily. In terms of profit margin, the gross profit margin of the company in 2021 was 36.44%, a year-on-year decrease of 5.13pct, and the net profit margin was 11.33%, a year-on-year increase of 3.03pct. In 2022q1, the gross profit margin was 36.06%, a year-on-year decrease of 6.33pct, and the net profit margin was 12.66%, a year-on-year decrease of 3.70pct. Affected by the price rise of upstream raw materials, the company’s gross profit margin decreased, but the company’s net profit margin increased in 2021, indicating that the company continued to optimize management and improve profitability.
The business of two machine parts increased rapidly, and the downstream demand was accelerated. In terms of business, the company’s aerospace new materials and parts business grew rapidly in 2021, with a revenue of 511 million yuan, a year-on-year increase of 59.16% and a gross profit margin of 46.39%, a year-on-year decrease of 2.42pct. The company’s “two machines” business has accumulated more than 500 kinds of blade, ring parts and gearbox orders, and about 270 varieties are still in the development stage. Sufficient model reserves open space for the rapid growth of business in the future. The business of new nuclear materials and parts maintained steady development, with a sales revenue of 304 million yuan, a year-on-year increase of 6.64%, and a gross profit margin of 41.47%, a year-on-year decrease of 3.93pct. The company has made major breakthroughs in high-performance nuclear radiation shielding materials applied in important national fields, and it is expected to bring sufficient orders during the 14th Five Year Plan period. The company’s largest business, high-end equipment parts business, achieved 1.132 billion yuan, a year-on-year decrease of 2.91%, and the gross profit margin was 29.65%, a year-on-year decrease of 3.81 PCT. The downstream of this business is mainly the petrochemical and construction machinery industry, and the downstream demand has weakened.
The cost rate was well controlled, and the R & D investment increased steadily. The company’s three expenses accounted for 16.28% in 2021, with a year-on-year decrease of 1.30pct. Among them, the sales expense ratio was 1.67% (year-on-year -1.10pct), the management expense ratio was 9.38% (year-on-year + 0.67pct), and the financial expense ratio was 5.23% (year-on-year -0.86pct). The proportion of three fees in 2022q1 was 15.49% (year-on-year + 0.10pct), of which the sales expense rate was 1.81% (year-on-year + 0.57pct), the management expense rate was 6.71% (year-on-year -2.96pct), and the financial expense rate was 6.96% (year-on-year + 2.48pct). The cost rate of the company is well controlled and the level of operation and management is high. The company’s R & D expenditure in 2021 was 248 million yuan, with a year-on-year increase of 10.77%, and the R & D expenditure rate was 12.17% (year-on-year -0.06pct). The company’s R & D investment increased steadily.
The cash flow situation has improved, and the company’s operation is expected to improve. The company’s operating cash flow in 2021 was 224 million yuan, with a year-on-year decrease of 44.64%, mainly due to the increase in the payment of materials and employee compensation in 2021. The operating cash flow in 2022q1 was 104 million yuan, with a year-on-year increase of 63.30%, and the cash flow situation improved. At the end of 2021, the company’s contractual liabilities were 17 million yuan, a year-on-year increase of 4.58%. In terms of accounts receivable, the company’s sales revenue increased by 31.27% year-on-year to 913 million yuan at the end of 2021. The company’s inventory at the end of 2021 was 1.270 billion yuan, a year-on-year increase of 0.60%, indicating that the company’s product delivery was smooth. During the reporting period, the company’s compensation expenses for the collection and storage of two pieces of land totaled 2.508 billion yuan, which is expected to optimize the company’s asset liability structure and improve the company’s cash flow level.
Investment suggestion: we maintain the company’s profit forecast. It is estimated that the company’s revenue from 2022 to 2024 will be 24.39/29.50/3.516 billion yuan respectively, the net profit attributable to the parent company will be 506/3.97/542 million yuan respectively, and the corresponding EPS will be 0.74/0.58/0.79 yuan respectively. The corresponding PE is 15.0x/19.1x/14.0x, maintaining the “buy” rating.
Risk warning event: the development of traditional casting and nuclear power business is not as expected; Risk of price fluctuation of raw materials; The risk of uncertain land acquisition and storage; Military products business was less than expected.
