Jingjin equipment ( Jingjin Environmental Protection Co.Ltd(603279) )
Event:
Jingjin equipment released the first quarterly report of 2022: the company achieved a revenue of 1.145 billion yuan, a year-on-year increase of 30.49%; The net profit attributable to the parent company was 153 million yuan, a year-on-year increase of 54.54%.
Key investment points:
Orders continued to increase + gross profit margin increased + overhead rate decreased, and the net profit attributable to the parent company increased by 55% year-on-year. In 2022q1, the net profit attributable to the parent company increased by 54.54% year-on-year. We think there are three main reasons: first, the continuous increase of orders drove the revenue to increase by 30.49% year-on-year; Second, the gross profit margin increased by 1.38pct to 29.47% year-on-year; Third, the expense rate of the period decreased by 1.56 PCT year-on-year, of which the administrative expense rate decreased by 2.79 PCT year-on-year, mainly because the amortization of equity incentive cost of 30.48 million yuan in 2021q1 led to a high base of administrative expenses in the period. Overall, the net profit margin of 2022q1 company was 13.39%, with a year-on-year increase of 2.08pct and a month on month decrease of 1.6pct.
Order increase + low base effect resulted in a significant increase in operating net cash flow. The operating net cash flow of 2022q1 company was 140 million yuan, a year-on-year increase of 233% compared with 42 million yuan in the same period last year, mainly due to the low base caused by the continuous increase of orders and the increase of employee compensation and taxes paid in 2021q1. From the perspective of operating net cash flow / income, the index is 12.3% in 2022q1, slightly lower than the average value of 14.2% in 2021q2-q4, which is at a relatively reasonable level.
Profit forecast and investment rating: the company continues to expand the application of products in high prosperity tracks such as lithium battery and gravel, and the promotion of market-oriented application of new products is superimposed. The company’s performance is expected to maintain a high growth. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 856 / 1109 / 1.325 billion respectively, with a year-on-year growth rate of 32% / 29% / 20% respectively, and the corresponding PE will be 16x / 12x / 10x respectively. Maintain the “buy” rating.
Risk warning: the development of the industry is lower than expected; Industry competition intensifies; Technology substitution in the industry; The market share of the company decreased; The price of raw materials has increased significantly; The market-oriented application of new products is not as expected.
