\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 885 Hongfa Technology Co.Ltd(600885) )
Performance summary: the company achieved an operating revenue of 10.023 billion yuan in 2021, with a year-on-year increase of 28.18%; The net profit attributable to the parent company was 1.063 billion yuan, a year-on-year increase of 27.69%; The net profit deducted from non parent company was 923 million yuan, with a year-on-year increase of 32.98%; EPS is 1.43 yuan. In the first quarter of 2022, the revenue was 2.875 billion yuan, a year-on-year increase of 20.82%; The net profit attributable to the parent company was 279 million yuan, a year-on-year increase of 20.78%.
The expense rate has decreased steadily, and the profitability is expected to recover. In 2021, the company’s gross profit margin was 34.58%, a year-on-year decrease of 2.37pp, due to the rise in the price of raw materials and the transfer of transportation expenses in sales expenses to operating costs. The net interest rate of the company was 14.49%, with a year-on-year increase of 0.05pp, of which the sales expense rate increased by 1.6pp year-on-year; The management expense ratio decreased by 0.38pp year-on-year; The financial expense ratio decreased by 0.03pp year-on-year; The R & D expense rate increased by 0.07pp year-on-year, and the expense rate decreased steadily. As the domestic leader of relay, the company has strong bargaining power, and is expected to transmit the pressure of bulk price rise to the downstream, achieve better control on the cost side, and achieve stable and upward profitability.
Relay share continues to expand and is optimistic about downstream structural opportunities. In 2021, the company achieved a revenue of 8.671 billion yuan, a year-on-year increase of 32.6%. Among them, general relay: the company has reached cooperation with Miller, Whirlpool (China) Co.Ltd(600983) , Electrolux and other high-end brands, and the global market share has increased by 3%; High voltage DC relay: the company deeply binds its head customers and establishes cooperative relations with global mainstream new energy vehicle manufacturers, including Tesla, Mercedes Benz, BMW and other high-end vehicle manufacturers. The global market share of high voltage DC products reaches 36%; Power relay: in addition to the recovery of the home appliance market, photovoltaic relay closely follows the development trend of the industry. Its products have been recognized by benchmark customers such as Huawei and Sungrow Power Supply Co.Ltd(300274) and have a market share of more than 50% in high-end customers; Industrial relay: the product demand is highly consistent with the industrial automation industry. The high investment demand of lithium battery and 3C in the OEM market and the high double carbon energy-saving requirements of metallurgy and chemical industry in the project-based market are expected to drive the high demand of the company’s industrial relay.
Low voltage electrical appliances are the second major business of the company, and the new power system drives the increase of demand. As the second major business of the company in 2014, low-voltage electrical appliances has been gradually on the right track. In 2021, the market sales and per capita payment collection increased by more than 20%. In addition, the investment demand of the “14th five year plan” power grid for new power systems has increased greatly compared with the past, and gradually transmitted to the upstream. We believe that the improvement of downstream distribution network side, photovoltaic and wind power demand is expected to drive the company’s low-voltage electrical products to achieve full volume.
Profit forecast and investment suggestions. It is estimated that the company’s revenue from 2022 to 2024 will be 12.502 billion yuan, 15.316 billion yuan and 19.341 billion yuan respectively, and the net profit attributable to the parent company will maintain a compound growth rate of 31.26% in the next three years. The company has strengthened the expansion of high-quality customers, the medium and long-term performance is expected to be fully realized, and the “hold” rating is given for the first time.
Risk warning: the risk of market demand decline caused by macroeconomic fluctuations; The risk of intensified market competition caused by the increase of foreign investment; The risk that the development of new products and technologies fails to meet the expectations.
