\u3000\u3 China Vanke Co.Ltd(000002) 897 Wenzhou Yihua Connector Co.Ltd(002897) )
Event: on April 28, 2022, the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved an operating revenue of 4.490 billion yuan, a year-on-year increase of 37.37%; The net profit attributable to the parent company was 136 million yuan, a year-on-year decrease of 24.67%. In the first quarter of 2022, the company achieved an operating revenue of 1.046 billion yuan, a year-on-year increase of 23.76%; The net profit attributable to the parent company was 45 million yuan, a year-on-year increase of 58.80%.
In 2021, the company's business layout will be optimized, and the company's revenue will continue to be driven by innovation. In 2021, the company will continue to improve its business layout and maintain its efficiency. In 2021, the company realized an operating revenue of 4.490 billion yuan, a year-on-year increase of 37.37%. In terms of products, the company's communication connector products achieved an operating revenue of 1.103 billion yuan in 2021, with a year-on-year increase of 6.63%; The operating income of consumer electronic connector products was 344 million yuan, a year-on-year increase of 16.93%; Other connector and component products achieved an operating revenue of 602 million yuan, a year-on-year increase of 30.55% Cecep Solar Energy Co.Ltd(000591) support business achieved substantial growth, with a revenue of 2.256 billion yuan, an increase of 70.47% year-on-year.
The ability of cost control is good, and the gross profit margin of Q1 stabilized and rebounded in 22 years: affected by factors such as repeated outbreaks outside China and sharp rise in raw material prices, the gross profit margin of the company decreased by 5.41pct to 17.12% year-on-year in 2021. Thanks to the good cost control ability, the company's sales expense ratio decreased by 0.23pct to 2.31% year-on-year in 2021; The rate of administrative expenses decreased by 1.69pct to 8.05% year-on-year; The financial expense ratio decreased by 0.63pct to 2.16% year-on-year. The decline of expense rate hedged the impact of the decline of some gross profit margins. In 2021, the company's net profit margin decreased by 2.63pct to 2.70% year-on-year. In 2022, Q1's gross profit margin stabilized and rebounded, with a year-on-year increase of 2.79 PCT, a month on month increase of 5.70 PCT to 20.47%, and a year-on-year increase of 0.84 PCT to 4.03% in net profit margin. We expect that in the future, with the stabilization of raw material prices and the continuous introduction of the company's high-speed communication connector products, the company's profitability will continue to recover.
Stripping loss making assets will further improve the company's performance: in March 2022, in order to focus on the company's main business and further optimize the allocation of resources, the company plans to transfer 95% of the equity of Hunan Yihua to Yihua Holding Group Co., Ltd. at the price of RMB 116267 million. After the transfer, the company will no longer hold the equity of Hunan Yihua, and Hunan Yihua will no longer be included in the scope of the company's consolidated statements. Hunan Yihua lost 54.97 million yuan in 2020 and 35.2 million yuan from January to September 2021. After the stripping of loss making assets, the company's performance will be further improved.
Investment suggestion: the company has more than 20 years of experience in R & D of communication connectors and expanded the photovoltaic support business. We expect the operating revenue of the company from 2022 to 2024 to be 5.558/69.16/8.588 billion yuan respectively, with a year-on-year increase of 23.8% / 24.4% / 24.2%; The net profit attributable to the parent company was 314 / 424 / 536 million yuan respectively, with a year-on-year increase of 131.6% / 34.9% / 26.6%; The corresponding EPS is 1.84/2.48/3.14 yuan respectively. We gave the company 18 times PE in 2022, corresponding to the target price of 33.12, maintaining the "Buy-A" investment rating.
Risk tips: risks of intensified market competition, less than expected market demand, less than expected new technology research and development and new product development, fluctuations in raw material prices and exchange rate fluctuations
