\u3000\u3 Shengda Resources Co.Ltd(000603) 859 Nancal Technology Co.Ltd(603859) )
Event: on April 28, 2022, the company released the results of the first quarter of 2022. In 2022, Q1 company achieved a total revenue of 268 million yuan, a year-on-year increase of 29.55%; The net profit attributable to the parent company was 31 million yuan, a year-on-year increase of 30.48%; The net profit attributable to the parent company after non deduction was 28 million yuan, a year-on-year increase of 25.09%.
Comments:
The first quarter results are in line with expectations and are optimistic about the digital transformation and development of Chinese manufacturing enterprises
According to the company’s announcement, the company’s operating revenue and net profit attributable to the parent company in the first quarter of 2022 still maintained a high growth. Under the repeated epidemic situation in China, the company’s performance showed good resilience. We believe that as a non heavy asset project, the enterprise digital transformation project can be promoted through remote communication and construction under the background of local epidemic in China in the first half of the year. From the current strong epidemic control measures of the Chinese government, the high probability of epidemic in China in the second half of the year will be effectively controlled, and the digital transformation project of manufacturing industry affected by the epidemic in the first half of the year will also be accelerated in the second half of the year. From the perspective of the whole year, The digital transformation process of China’s manufacturing industry is expected to maintain a high momentum as scheduled.
The basic market is stable and the gross profit margin is expected to increase
The company has been deeply engaged in the digital transformation business in the field of national defense and military industry for many years, and has rich industry experience. Considering the high scenery of the military digital track and the company’s technical strength during the 14th Five Year Plan period, it is expected to ensure the stable growth of the company’s basic sector. On the other hand, the company’s active layout in many industries such as electronic high technology, transportation, equipment manufacturing and energy power is also expected to boost the company’s performance. Meanwhile, in the future, with the accelerated iteration of the company’s self-developed products and the gradual large-scale performance of self-developed products, the overall gross profit margin of the company is expected to further increase and maintain the profitability of the company for a long time.
The company continues to benefit from intelligent manufacturing with thick snow on Changpo
China’s manufacturing industry has a large base and relatively backward automation level. When it is unable to rely on radical expansion of production scale to increase profits, the ability of enterprise digital transformation to reduce costs and increase efficiency is gradually highlighted. The willingness of manufacturing customers to digital transformation is significantly enhanced. With the positive promotion of superposition policies, intelligent manufacturing is expected to usher in a historic development opportunity. We believe that compared with process intelligent manufacturing, discrete intelligent manufacturing presents the characteristics of “small and scattered”, and the downstream demand is mostly distributed in a point shape, so flexible intelligent manufacturing solutions are needed to solve the pain points in the actual business. As a leading intelligent manufacturing enterprise in China, the company actively arranges the medium and Taiwan products of intelligent manufacturing and provides competitive intelligent manufacturing solutions for enterprises. Under the trend of gradually increasing the willingness of manufacturing customers to digital transformation, the company is expected to develop well in the long term.
Actively improve the proportion of self-developed products and further open the downstream customer market
The company actively promotes the development of self-developed products. At present, it has released three kinds of self-developed product series: apaas, cloud service platform and data platform. With the further improvement of the company’s self-developed ability and product standardization, the gross profit margin of the company’s products is expected to increase significantly and enhance the profitability of the company. At the same time, the downstream customer group of the company continues to expand. At present, the company has launched “Lechang productivity middle platform” for big G and big B customers to help enterprises carry out digital reconstruction in the form of apaas Lechang middle platform; Launch “post factory manufacturing” for small and medium-sized customers and provide one-stop platforms such as information, training, materials, software, tools and resources. With the end of the performance gambling period between the company and Shanghai Lianhong, it is expected that the company will actively integrate resources, improve the overall business synergy, enrich the company’s product matrix and further open more customers in automobile, electronics and other industries.
Profit forecast and investment rating
The company will actively layout intelligent manufacturing related businesses, actively build an intelligent manufacturing platform, and build its own technical advantages and comprehensive competitiveness, which will benefit from the development of “industry 4.0”. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 212 million yuan, 282 million yuan and 377 million yuan respectively, corresponding to 17.35 times, 13.05 times and 9.76 times of PE, maintaining the “buy” rating.
Risk factors
The digital transformation of manufacturing industry is less than expected, the risk of policy change, the risk of intensified market competition and the risk of loss of core personnel
