\u3000\u3 Guocheng Mining Co.Ltd(000688) 188 Shanghai Friendess Electronic Technology Corporation Limited(688188) )
Event: on April 28, 2022, Shanghai Friendess Electronic Technology Corporation Limited(688188) released the first quarter report of 2022. In Q1 single quarter, the company realized a net profit of 102 million yuan, a year-on-year increase of - 9.9%.
The high market share is greatly affected by the overall prosperity of the industry, and the logic of increasing the high-power business share of the company will not be changed. In the single quarter of 2022q1, Bochu's revenue increased by + 1.4% year-on-year to 190 million yuan; The net profit deducted from non parent company was 102 million yuan with - 9.9% year-on-year; The gross profit margin in a single quarter was 78.54%, with a year-on-year ratio of -2.2pp and a month on month ratio of -0.49pp. In terms of period expenses, the sales expense ratio was 3.7%, year-on-year + 0.4pp; The management expense ratio was 5.5%, year-on-year + 0.7pp; The R & D expense ratio was 11.2%, with a year-on-year increase of + 1.7pp; The above expense rate is 20.5% in total, with a year-on-year increase of + 2.8pp. In the first quarter of this year, China's manufacturing industry and laser cutting industry were under pressure as a whole, and the company was located in Shanghai. The epidemic control was upgraded in March. It is expected that the rhythm of order confirmation of the company was affected by logistics obstruction to a certain extent, and further superimposed with the company's cutting control system, especially the low-power system, which has a high market share and is more vulnerable to the overall prosperity. Looking forward to the whole year of 2022, we expect the growth rate of the company's cutting system business to slow down due to three considerations: (1) the overall prosperity of the manufacturing industry in 2022 is under pressure; (2) The saturation of low and medium power laser cutting market is increasing day by day. It is expected that the equipment manufacturers will enter the clearing stage, and the pressure of small equipment manufacturers will be greater; (3) Industry competition intensifies. However, in terms of high-power system, the company is expected to reproduce the previous development mode of low and medium power. In addition, intelligent cutting head business and intelligent welding system are expected to open the ceiling of medium and long-term growth of the company.
Intelligent cutting head and other businesses are fast and large-scale. Relying on the high share of the company's cutting system, it is expected to continue to develop rapidly. Intelligent cutting head business: Taking Bosi automation as the main operation, it has achieved a major breakthrough in 2021, with a year-on-year revenue of + 647% of 81.9 million yuan and a sales volume of about 1638 units (estimated at an average price of 50000 yuan / unit). Compared with the sales volume of the company's low-power and high-power systems, there is still much room for improvement. If the company subsequently launches economic products, it is expected to sink into the low-power market. Relying on the high market share of the company's cutting system, it is expected to continue to develop rapidly. Other businesses such as nesting software: if the revenue of bospin is subtracted from the revenue of the "other" sector of the company, it is estimated that it will be 58 million yuan and 102 million yuan respectively in 2020 and 2021, with a year-on-year growth rate of + 74% in 2021. The growth level is high. This kind of business is charged according to the service time of the terminal and has good sustainability. It is expected to maintain a high growth with the strengthening of customers' awareness of software purchase. Welding system: the company has developed welding Siasun Robot&Automation Co.Ltd(300024) digital twin software based on three-dimensional modeling core, which can quickly generate welding path. There is a wide space for steel structure welding automation. We are optimistic about the subsequent volume of this business and open the ceiling of the company again.
Investment advice. We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 730 million, 950 million and 1.17 billion respectively, corresponding to pe35, 27 and 22 times. We are optimistic about the good development of the company's new businesses such as high-power, cutting head and intelligent welding system, as well as the strong ductility and broad space brought by technology, and maintain the "buy in" rating.
Risk tip: macroeconomic growth slows down, industry competition intensifies, and the expansion of raised investment projects is less than expected.
