\u3000\u3 Guocheng Mining Co.Ltd(000688) 268 Guangdong Huate Gas Co.Ltd(688268) )
Event: on April 29, the company released the first quarter report of 2022. In the first quarter, the company realized an operating revenue of 383 million yuan, a year-on-year increase of 30.68%; The net profit attributable to the parent company was 39 million yuan, an increase of 41.12% year-on-year and 48.19% month on month; The net profit deducted from non return to parent was 35 million yuan, with a year-on-year increase of 45.88% and a month on month increase of 75.54%.
Q1 performance grew faster than expected and improved significantly month on month. The company achieved an operating revenue of 383 million yuan in the first quarter, a year-on-year increase of 30.68%; The net profit attributable to the parent company was 39 million yuan, an increase of 41.12% year-on-year and 48.19% month on month; The net profit deducted from non return to parent was 35 million yuan, with a year-on-year increase of 45.88% and a month on month increase of 75.54%; The gross profit margin of sales was 25.72%, with a year-on-year increase of 2.41 PCT and a month on month increase of 2.62 PCT; The net profit margin of sales was 10.17%, up 0.73 PCT year-on-year and 2.7 PCT month on month. Under the pressure of raw materials and the adverse factors of the epidemic, the company still achieved more than expected growth, significantly improved month on month, and rapidly repaired its profitability, highlighting the nature of the industry’s leading enterprises.
The concentration of head customers has increased significantly, which is expected to fully benefit from the expansion of wafer production. In 2021, the company’s supply to a single semiconductor customer exceeded 100 million yuan. With the large volume of customers, in 2021, the sales of the company’s top five customers were 320 million yuan, accounting for 23.75% of the operating revenue, an increase of 65.47% over the same period of last year. The concentration of head customers increased significantly, and its position in key customers was further strengthened. We believe that with its excellent R & D ability and business layout, the company will deepen the binding of core customers and consolidate its competitive advantage in the supply chain.
Actively expand categories horizontally, vertically merge and acquire, and improve the industrial chain. In terms of horizontal layout, the company continued to introduce a variety of products such as fluorocarbons, hydrides and oxynitrides into the original semiconductor customers, and further improved the category expansion of semiconductor customers. Among them, high-purity germanium has been supplied to the second largest memory enterprise in South Korea. After the product passed the yfl certification of a well-known semiconductor enterprise in Germany in 2021, it has generated certain orders. In terms of vertical layout, in 2021, the company newly established four wholly-owned and holding subsidiaries, one merger and acquisition, one joint venture and one equity participation. Its main business is focusing on the company’s special gas and ordinary bulk gas, improving the industrial chain model, signing the supply contract of new material on-site gas production project, and opening the field of electronic bulk gas business.
Investment suggestion: the company’s earnings per share from 2022 to 2024 are expected to be 1.48, 2.13 and 2.90 yuan respectively, corresponding to 32, 23 and 17 times of PE respectively, maintaining the “buy” rating.
Risk tips: the downstream demand is less than expected, the risk of foreign exchange fluctuation, the progress of production expansion projects is less than expected, and the expansion of new customers is less than expected.
