\u3000\u3 Shengda Resources Co.Ltd(000603) 197 Shanghai Baolong Automotive Corporation(603197) )
Event:
Shanghai Baolong Automotive Corporation(603197) released the annual report of 2021 and the first quarterly report of 2022: in 2021, the company realized an operating revenue of 3.898 billion yuan, a year-on-year increase of + 17.01%; The net profit attributable to the parent company was 268 million yuan, a year-on-year increase of + 46.52%. In Q1 2022, the company achieved an operating revenue of 965 million yuan, a year-on-year increase of + 3.6%; The net profit attributable to the parent company was 45 million yuan, a year-on-year increase of – 40.62%.
Key investment points:
Profitability is under short-term pressure. In 2021q4, the company achieved an operating revenue of 1.058 billion yuan, a year-on-year increase of + 3.74%; The net profit attributable to the parent company was 44 million yuan, a year-on-year increase of + 3.43%; The gross profit margin was 10.91%, with a year-on-year increase of -22.33pct; The net interest rate was 4.62%, with a year-on-year increase of + 3.05pct. In the whole year, the gross profit margin of the company was 27.41%, with a year-on-year increase of -4.47pct; The net interest rate was 7.48%, with a year-on-year increase of + 3.51pct, mainly due to the increase in costs caused by the sharp rise in the price of raw materials, the rise in freight and the rise in customs clearance taxes.
Q1 revenue in 2022 was + 3.60% year-on-year, and the revenue increased year-on-year for seven consecutive quarters. In 2022q1, the company realized an operating revenue of 965 million yuan, a year-on-year increase of + 3.60%; The net profit attributable to the parent company was 45 million yuan, a year-on-year increase of – 40.62%; The gross profit margin was 28.28%, with a year-on-year increase of -6.24pct; The net interest rate was 4.58%, with a year-on-year increase of -3.36pct. The main reasons are: 1) the price of raw materials has risen sharply; 2) Appreciation of RMB; 3) Rising international freight, etc. From 2020q3 to 2022q1, the company has achieved a year-on-year increase in revenue for seven quarters.
In 2021, the cost rate was -5.19pct year-on-year, and the cost control ability was good. During the reporting period, the expense rate was 20.12%, with a year-on-year increase of -5.19pct. The sales expense ratio was 4.99%, with a year-on-year increase of -3.73pct; The management expense ratio was 6.16%, with a year-on-year increase of -0.67pct; The financial expense ratio was 1.77%, year-on-year -0.34pct; The R & D expense ratio was 7.20%, with a year-on-year increase of -0.45pct.
The revenue of traditional business increased steadily. 1) TPMS and accessories and tools: in 2021, the revenue was 1.332 billion yuan, a year-on-year increase of + 16.96%, and the gross profit margin was 25.46%, a year-on-year increase of + 4.10 PCT; 2) Automobile metal pipe fittings: in 2021, the revenue was 1.165 billion yuan, a year-on-year increase of + 20.05%, and the gross profit margin was 19.57%, a year-on-year increase of -9.35 PCT; 3) Valves and accessories: in 2021, the revenue was 688 million yuan, a year-on-year increase of + 14.84%, and the gross profit margin was 42.06%, a year-on-year increase of -6.26pc. Mature traditional businesses are contributing sustained and stable cash flow to the company.
The four new businesses of sensors, ADAS, structural parts and air spring vibration reduction have entered the fast lane of development. In 2021, 8.9848 million sensors were sold, a year-on-year increase of + 31.23%. At present, the company has obtained the fixed point of air suspension system project of three main engine plants. In 2022, the company will continue to invest in the development of intelligent and lightweight new products and the expansion of new business. Sensors, ADAS, structural parts, passenger car air springs and other products will enter the stage of rapid business growth.
As the leader of tmps, profit forecasting and investment rating company, with the gradual popularization of TPMS, the scale of China’s market continues to grow, and the TPMS transmitter in the stock market of North America and the EU enters the replacement week. It is expected that the OEM and after-sales market will continue to increase in volume. In terms of new business, sensors, ADAS, structural parts, passenger car air springs and other products will enter the stage of rapid business growth. It is estimated that the company’s main business income from 2022 to 2024 will be 4.6 billion yuan, 5.7 billion yuan and 6.9 billion yuan, with a year-on-year growth rate of 18%, 23% and 22%; The net profit attributable to the parent company was RMB 330 million, RMB 410 million and RMB 510 million, with a year-on-year growth rate of 22%, 26% and 23%; The corresponding EPS is 1.57, 1.98 and 2.44 yuan; The corresponding PE is 19, 15 and 12, the valuation is reasonable, and the “buy” rating is given for the first coverage.
Risk Tips 1) the price of raw materials continues to rise; 2) International shipping prices continued to rise; 3) The sales growth of new energy vehicles was lower than expected; 4) The company’s new customer expansion is less than expected; 5) The company’s new business capacity is lower than expected.
