\u3000\u3 Guocheng Mining Co.Ltd(000688) 122 Western Superconducting Technologies Co.Ltd(688122) )
Event: on April 28, 2022, the company released the annual report of 2021 and the first quarter report of 2022. In 2021, the company realized an operating revenue of 2.927 billion yuan (+ 38.54%); The net profit attributable to the parent company was 741 million yuan (+ 99.98%); Deduct the net profit not attributable to the parent company of RMB 654 million (+ 122.79%). In 2022q1, the company realized an operating revenue of 887 million yuan (+ 66.51%); The net profit attributable to the parent company was 215 million yuan (+ 67.40%).
In 2021, the company’s revenue and performance increased significantly, and its profitability improved significantly. In terms of product revenue, in 2021, the company’s high-end titanium alloy materials achieved a revenue of 2.458 billion yuan, a year-on-year increase of 37.90%; Superconducting products achieved a revenue of 239 million yuan, a year-on-year increase of 22.86%; High performance superalloy materials achieved a revenue of 102 million yuan, a year-on-year increase of 196.67%. In terms of gross profit margin, the gross profit margin of the company’s high-end titanium alloy materials was 45.31% in 2021, with a year-on-year increase of 2.28pp; The gross profit margin of superconducting products was 16.33%, with a year-on-year increase of 11.82pp; The gross profit margin of high-performance superalloy materials was 4.01%, a year-on-year increase of 15.43pp, and the gross profit margin became positive. The comprehensive gross profit margin of the company’s main business increased by 2.95pp year-on-year to 41.33%. In terms of expense rate, in 2021, the company’s four expense rate was 13.21%, a year-on-year decrease of 4.32pp. The company’s four expense rates of sales / management / R & D / finance were 1.73% / 4.30% / 6.35% / 0.83% respectively, with a year-on-year increase of 0.10pp / – 2.59pp / + 0.17pp / – 1.99pp respectively, showing a scale effect. In terms of net interest rate, the company’s net interest rate was 25.46% in 2021, with a year-on-year increase of 7.95pp, a record high.
The increase in contract liabilities may indicate sufficient orders and a significant improvement in cash flow from operating activities. The contract liabilities of the company in 2021 were 268 million yuan, with a year-on-year increase of 53.43%, mainly due to the increase in advance payment for contract signing, or indicating that the company has sufficient orders; The inventory was 1.599 billion yuan, with a year-on-year increase of 40.32%, mainly due to the sufficient business orders, the increase of in-process volume and issued goods; The company’s cash flow from operating activities improved significantly in 2021, with a net amount of 227 million yuan, compared with – 110 million yuan and – 222 million yuan in 2019 and 2020 respectively, and the company’s operating capacity was enhanced.
The company will increase production and expand production to break through the bottleneck, and its main business performance is excellent. The company raised 2.013 billion yuan through fixed increase. Among them, 971 million yuan will be invested in the industrialization project of high-performance metal materials for aerospace, with a construction period of 36 months. After the completion of the project, the production capacity of 5050 tons / year of titanium alloy materials and 1500 tons / year of superalloys will be added. 1008.2 million yuan will be used for the industrialization project of high-performance superconducting wire rod. The construction period is 24 months. After the project is completed, 2000 tons of superconducting wire rod for MRI will be formed. The company continued to expand the production capacity of high-end titanium alloy materials, superconducting materials and high-performance superalloy materials, breaking the current production capacity bottleneck of the company. In terms of high-end titanium alloy materials, the company broke through the key technologies of preparing a series of Engineering with large-scale titanium alloy materials, and the key technologies of regulating the strength and toughness of aviation ultra-high strength and high toughness titanium alloy materials, achieving a revenue of 2.458 billion yuan (year-on-year + 37.90%), an output of 710512 tons, a sales volume of 681349 tons, and an average product price of 360800 yuan / ton, lower than 369000 yuan / ton last year, but the gross profit margin increased by 2.28pp year-on-year, The main reason is that the cost of raw materials / labor per ton decreased by 13000 yuan / 0300 yuan respectively, resulting in a decrease of 12900 yuan per ton; In terms of superconducting materials, the revenue was 239 million yuan (+ 22.86%), the output was 676.04 tons, the sales volume was 556.92 tons, the gross profit margin increased by 11.82pp year-on-year, and the average price per ton increased by 33800 yuan, mainly due to the smooth expansion of MRI and MCZ fields. At the same time, the company’s superconducting wires have been supplied to craft pre research projects; In terms of superalloys, the revenue was 102 million yuan (+ 196.67%), and the gross profit margin increased by 15.43pp year-on-year. The gross profit margin became positive. Typical superalloys such as GH4169 and GH738 entered the stage of batch supply in 10 and other models of engines and Shangfa Changjiang series engines.
In 2022q1, the revenue and performance exceeded expectations, and the profitability was improved. Overall, by Q1 2022, the company had achieved a total revenue of 887 million yuan, a year-on-year increase of 66.51%; The net profit attributable to the parent company was 215 million yuan, a year-on-year increase of 67.40%. In terms of gross profit margin, as of Q1 2022, the comprehensive gross profit margin of the company’s main business was 40.76%, a year-on-year decrease of 0.50pp. In terms of period expense rate, as of Q1 2022, the company’s sales / management / R & D / financial expense rate was 0.40% / 5.35% / 4.25% / 0.65% respectively, with a year-on-year change of -0.29pp / – 2.33pp / – 0.64pp / + 0.47pp respectively. In terms of net interest rate, as of Q1 2022, the company’s net interest rate was 23.96%, a year-on-year increase of 0.22pp.
Profit forecast and investment suggestions: the company has a bright performance and improved profitability. We expect the net profit attributable to the parent company from 2022 to 2024 to be 1.102 billion yuan, 1.501 billion yuan and 1.92 billion yuan, corresponding to PE32, 23 and 18 times, maintaining the “buy” rating.
Risk tips: raw material price fluctuation risk, market demand fluctuation risk and core competitiveness decline risk
