\u3000\u3 Guocheng Mining Co.Ltd(000688) 305 Kede Numerical Control Co.Ltd(688305) )
Key investment points
The revenue side is basically in line with expectations, and non recurring factors affect the growth rate of short-term profits:
The company achieved a revenue of 60.73 million yuan in 2022q1, a year-on-year increase of + 20.65% and a month on month increase of – 34.55%; The net profit attributable to the parent company was 7.53 million yuan, with a year-on-year increase of – 41.33% and a month on month increase of – 71.31%; Deduct 3.99 million yuan of non parent net profit (2021q1 value is – 430000 yuan). Despite the disturbance of the Spring Festival holiday and the epidemic situation, the company’s overall production and operation maintained a good trend, producing 53 high-end CNC machine tools, a year-on-year increase of + 341.67%. Two new national level research projects were undertaken, with 25 million yuan and 3 million yuan respectively approved by the state.
The profit growth rate was lower than expected, mainly due to the disturbance of non recurring factors. 2021q1 company received a post research and development subsidy of RMB 12.84 million from the state allocated projects in previous years, which directly offset the current research and development expenses, which has a great impact on the non recurring income of 2021q1. In 2022q1, the company received 29.315 million yuan of R & D project subsidy, which was recognized as deferred income according to accounting standards to compensate the company’s subsequent related costs or offset the book value of related assets, which had little impact on the non recurring income of the current period. Therefore, we can see that the gross profit margin of 2022q1 is 42.4%, with a year-on-year ratio of -2.0pct and a month on month ratio of -1.6pct, which remains basically stable; The net profit margin of sales was 12.3%, year-on-year – 13.1% and month on month – 16.0%, which fell sharply due to non recurring factors. During 2022q1, the expense rate was 27.8%, with a year-on-year increase of + 15.9pct, of which the sales / Management (including R & D) / financial expense rate was – 1.9 / + 18.7 / – 1.0pct respectively year-on-year.
We judge that the profitability of the company is expected to return to the normal level as the R & D subsidy fund successively offsets the cost.
The new orders are in good condition and the operating cash flow is abundant:
At the end of Q1, the company’s contractual liabilities amounted to 28 million yuan, a year-on-year increase of – 18%. At present, the company’s demand for orders is still relatively strong. In 2022q1, the company added 106 million yuan of new orders (including tax and Unaudited), a year-on-year increase of + 116.19%; The inventory balance was 358 million yuan, a year-on-year increase of + 84%. The company’s net cash flow from operating activities was 12.73 million yuan, which was positive year-on-year and month on month, mainly due to the increase in government subsidies received.
Continue to invest in high R & D and be optimistic about the growth under the release of production capacity
2022q1 company’s R & D investment totaled 19.09 million yuan, a year-on-year increase of + 26.99%; Accounting for 31.43% of operating revenue, with a year-on-year increase of + 1.57pct. Relying on high R & D to build technical barriers and brand effect, under the continuous procurement of original aerospace and other customers, the company actively expanded downstream Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) , and achieved zero breakthrough in the fields of semiconductor wafer thinning machine, petrochemical pump valve and so on.
In 2022, the company will continue to promote the raising and investment project of increasing the production capacity of 500 five axis machine tools; At the same time, the production base of Yinchuan motorized spindle is expected to increase its production capacity to 250300 units in 2022, which is optimistic about the growth of the company under the rapid release of production capacity.
Profit forecast and investment rating: considering that the epidemic is only a short-term impact, we maintain the forecast of the company’s net profit attributable to the parent company from 2022 to 2024 as 113 / 161 / 211 million yuan, and the PE corresponding to the current stock price is 46 / 32 / 25 times respectively, maintaining the “overweight” rating.
Risk tip: the production expansion plan is less than expected, and the business volume is less than expected.
