\u3000\u3 Shengda Resources Co.Ltd(000603) 855 Warom Technology Incorporated Company(603855) )
Event: the company disclosed the annual report of 2021 and the first quarterly report of 2022: 1) in 2021, the revenue was 3.03 billion, yoy + 32.6%, the net profit attributable to the parent was 380 million, yoy + 46.2%, and the net profit not attributable to the parent was 310 million, YoY + 28.2%; 2) 2021q4: revenue 940 million, yoy + 8.5%, net profit attributable to parent company 83 million, yoy + 42.8%, net profit not attributable to parent company 61 million, yoy + 17.3%; 3) 2022q1: the revenue is 660 million, yoy + 28.7%, the net profit attributable to the parent company is 60 million, yoy-1.2%, and the net profit not attributable to the parent company is 81 million, yoy + 33.5%.
In 2021, all businesses achieved steady growth, and 2022q1 achieved a good start. In 2021, all sectors achieved steady growth: 1) factory explosion-proof: the revenue was 1.687 billion yuan, a year-on-year increase of 14.84%, of which the revenue of domestic trade department was 1.116 billion yuan, a year-on-year increase of 23.44%, and the revenue of foreign trade department was 571 million yuan, a year-on-year increase of 1.09%. The factory business segment achieved a net profit of 277 million yuan in 2021, with a year-on-year increase of 22.42%. In 2021, the company’s overseas explosion-proof business progressed slowly. On the one hand, it was due to the overseas epidemic and on the other hand, it was due to the obstruction of shipping, so it is expected to improve this year; 2) Professional lighting: the revenue was 325 million yuan, a year-on-year increase of 5.09%; The net profit reached 32 million yuan, a year-on-year decrease of 7.87%. At present, the net interest rate is only 9.8%, which is a big gap compared with the net interest rate of 20% of Ocean’S King Lighting Science & Technology Co.Ltd(002724) , which may reflect that the company made more profits to business developers for market development in the early stage, while the company’s new professional lighting plant was relocated in 2021. After the running in period is completed, the incentive of business developers is expected to be on the right track, and it is optimistic about the rising trend of net interest rate of changed business; 3) Energy business segment: the revenue was 953 million yuan, a year-on-year increase of 104.14%, of which the revenue of mining explosion-proof products was 246 million yuan, a year-on-year increase of 9.85%; The revenue of new energy EPC business was 697 million yuan, with a year-on-year increase of 192.96%. The energy business segment realized a net profit of 37 million yuan, a year-on-year increase of 267.24%. In 2022q1, the revenue increased by 28.7% year-on-year, and the net profit deducted from non parent company increased by 33.5% year-on-year, achieving a good start. The non recurring profit and loss was mainly the floating loss of investment generated by the company’s participation in Nyocor Co.Ltd(600821) fixed increase of corresponding equity measured by the fair value method last year.
It is expected that the company will still maintain rapid growth in 2022: 1) the factory explosion-proof electrical appliance business benefits from the upward trend of global and Chinese oil and gas expenditure. Historically, the company’s factory explosion-proof electrical appliance has a positive correlation with the capital expenditure of the oil and gas industry. 2022 is the year when the global and Chinese oil and gas began to rise, which is good for the explosion-proof electrical appliance industry; 3) Non oil and gas plant explosion-proof electrical appliances are in a high growth stage. The company has arranged many non oil and gas downstream such as Baijiu, medicine, nuclear power, dust, etc. under the background of stricter supervision of safety production requirements, the explosion-proof demand in non oil and gas fields is increasing day by day; 3) Mining explosion-proof benefits from the high prosperity of the coal mining industry, and the increased emphasis on safety production is expected to increase the purchase of explosion-proof electrical appliances; 4) Professional lighting entered a high growth stage after the completion of new site relocation + business developer mode last year.
Investment suggestion: considering the good development momentum of various businesses of the company, it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 460 / 600 / 800 million respectively, and the corresponding PE will be 14x / 11x / 8x respectively, maintaining the “recommended” rating.
Risk tip: there is a risk of slowing down downstream demand, and the Chinese epidemic continues to deteriorate, affecting the risk of delivery
