Jingjin equipment ( Jingjin Environmental Protection Co.Ltd(603279) )
Key investment points
Event: the company released the first quarterly report of 2022. In 2022q1, the company achieved a revenue of 1.15 billion yuan, an increase of 30.5% year-on-year and a decrease of 13.0% month on month; The net profit attributable to the parent company was 150 million yuan, with a year-on-year increase of 54.5% and a month on month decrease of 22.3%. The company's performance grew rapidly, exceeding our expectations.
The demand for filter press is relatively strong, the company's revenue has maintained rapid growth, and the gross profit margin has increased steadily. The downstream demand of filter press is strong. As the absolute leader of the industry, the company has achieved steady growth in orders and revenue. In 2022q1, the company's comprehensive gross profit margin was 29.5%, with a year-on-year increase of 1.4 percentage points and a month on month decrease of 1.0 percentage points. Although the price of raw materials remained high, the company could still keep the gross profit margin stable through measures such as product price increase and strengthening cost control.
Q1 equity incentive expenses decreased, the expense rate continued to decline during the period, and the company's net interest rate increased year-on-year. During 2022q1, the expense rate of the company was 11.2%, a year-on-year decrease of 1.6 percentage points and a month on month decrease of 1.4 percentage points; Among them, the management fee rate was 3.6%, a year-on-year decrease of 2.8 percentage points, mainly due to the sharp year-on-year decrease in equity incentive fees. The net interest rate of 2022q1 company was 13.4%, with a year-on-year increase of 2.1 percentage points and a month on month decrease of 1.6 percentage points.
There is strong demand in emerging markets, and the proportion of revenue continues to increase. In recent years, the demand for filter presses in emerging markets such as new energy, new materials and gravel aggregates has increased rapidly. The company has seized the opportunity to meet the needs of downstream customers through strong R & D and customization capabilities. In 2021, the proportion of revenue in the two emerging markets increased to 10.3% and 8.7% respectively, with a year-on-year increase of 2.4 and 1.6 percentage points respectively. It is expected that the demand in the new energy market will continue to grow rapidly in 2022.
Supporting equipment and accessories have great development potential and create a second growth curve. The company is committed to becoming the world's leading manufacturer of complete sets of filtration equipment, and there is a strong demand for complete sets of filtration equipment in the current market. Therefore, the company changed the "project with an annual output of 20000 sets of high-performance filtration system" to "phase I project of industrialization of complete sets of filtration equipment", so as to improve the product types and production capacity of complete sets of equipment, meet the market demand and improve the company's performance. In addition, the company's filter cloth, filter sector and other accessories are technologically advanced, and will gradually contribute to incremental performance with the gradual release of production capacity.
Profit forecast and investment suggestions. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 870 million, RMB 1180 million and RMB 1.54 billion respectively, and the compound growth rate of net profit attributable to the parent company in the next three years will be 33.5%. The company is the global leader of filter press, with strong downstream demand. Supporting equipment and accessories create the second growth curve, giving 25 times PE in 2022 and a target price of 53.00 yuan, maintaining the "buy" rating.
Risk tips: covid-19 epidemic recurrence risk, macroeconomic fluctuation risk, the company's new product development is not as expected, etc.
