\u3000\u3 Shengda Resources Co.Ltd(000603) 179 Jiangsu Xinquan Automotive Trim Co.Ltd(603179) )
Event overview
The company announced the first quarterly report of 2022: in 2022q1, the revenue was 1.49 billion yuan, a year-on-year increase of 33.3%, a month on month increase of 10.5%, the net profit attributable to the parent was 80 million yuan, a year-on-year decrease of 13.3%, a month on month increase of 29.7%, and the net profit not attributable to the parent was 80 million yuan, a year-on-year increase of 6.5% and a month on month increase of 18.3%.
Analysis and judgment:
Revenue hit a single quarter, and the continuous contribution of new high-tech energy increased
The company’s revenue in 2022q1 reached 1.49 billion yuan, a single quarter high of + 33.3% year-on-year and + 10.5% month on month. We judge that the same month on month growth is mainly due to the contribution of international well-known brand electric vehicle enterprises, Byd Company Limited(002594) and other new energy, which drives the rapid growth of passenger vehicle business, while the commercial vehicle business is under pressure due to the weakness of heavy truck sales (2022q1 year-on-year – 56%). The month on month growth rate of net profit deducted from non return to parent is higher than that of revenue, highlighting the scale effect. Looking forward to the whole year of 2022, with the further increase of the proportion of new energy business and the slowdown of the impact of raw material price rise, the performance is expected to return to high growth.
The gross profit margin is under pressure year-on-year, and the expenses are reasonably controlled
Considering the implementation of the changed accounting policy from January 1, 2022 (reclassifying the transportation expenses incurred in performing the customer’s sales contract before the control of the goods is transferred to the customer from “sales expenses” to “operating costs”), the company’s gross profit margin in 2022q1 is 19.5%, and the adjusted gross profit margin in 2021q1 is 21.6%, with a year-on-year increase of -1.1pct, We judge that the year-on-year decline is mainly affected by the decline in the proportion of commercial vehicle business with high gross profit margin and the rise in the price of raw materials. The improvement of capacity utilization is expected to drive the gross profit margin of passenger vehicle business to rise against the trend. Considering that the adjusted freight amount of 2021q4 is not disclosed, if considering the month on month change, according to the comparison of gross profit margin – selling expense rate, the gross profit margin – selling expense rate in 2022q1 reaches 17.5%, which is + 1.4pct month on month, showing an improvement trend.
In terms of expenses, the R & D expenses in 2022q1 reached 70 million yuan, a year-on-year increase of + 25.4%, and the corresponding R & D expense rate was – 0.3pct to 5.0% year-on-year. New projects were increasing and R & D investment in new processes and technologies was maintained; The management expense rate, sales expense rate (after adjustment) and financial expense rate were 4.9%, 1.9% and 0.5% respectively, with a year-on-year rate of 0.0pct, + 0.4pct and – 0.2pct respectively, and the expenses were reasonably controlled.
Ride business two wheel drive sword finger interior faucet
Passenger cars: actively embrace new energy and increase both volume and price. The company actively embraces new energy, enters Tesla‘s supply system and demonstrates its competitive strength. It is expected to grow with Tesla and realize the simultaneous increase of volume and price. In addition, it also expands new energy vehicle types such as ideal vehicle, velai vehicle, Byd Company Limited(002594) , GAC new energy, Geely vehicle, Great Wall Motor Company Limited(601633) and so on. In the medium and long term, under the increasing pressure of global auto enterprises to reduce costs, the replacement of interior decoration imports has accelerated, and the scale of China has reached 100 billion yuan. We judge that the penetration rate of independent brands will continue to increase. The company is expected to seize the share with high cost performance and rapid response ability. We expect that the revenue is expected to exceed 15 billion yuan in 2025.
Commercial vehicles: category expansion + globalization, and the share continues to increase. The company’s commercial vehicle customers mainly include Faw Jiefang Group Co.Ltd(000800) , BAIC Foton, etc. we expect the supporting share to reach more than 60%. In the future, we will accelerate the penetration of other customers and realize global supporting by expanding categories and upgrading with heavy trucks.
Investment advice
New power supply chain + independent brand supply chain, import substitution sword refers to the global leader in interior decoration: the company actively embraces new energy and gradually expands new power customers such as Tesla, ideal and Weilai, which is expected to accelerate the increase of market share by virtue of high cost performance and rapid response ability. Taking into account the increase in the proportion of new energy business, maintain the profit forecast: it is expected that the revenue in 202224 will be 6.74/85.0/10.03 billion yuan, the net profit attributable to the parent company will be 5.5/7.2/900 million yuan, and the EPS will be adjusted from 1.47/1.91/2.40 yuan to 1.13/1.48/1.85 yuan (due to the conversion to share capital), corresponding to the closing price of 25.0 yuan on April 29, 2022, pe22 / 17 / 14 times, maintaining the “buy” rating.
Risk tips
The sales volume of the passenger car industry is lower than expected, the customer expansion is lower than expected, the industry competition is intensified, and the cost of raw materials is increased.
