\u3000\u3 China Vanke Co.Ltd(000002) 938 Avary Holding (Shenzhen) Co.Limited(002938) )
The company’s 2022q1 reflects the flexibility of capacity growth rate, achieves high growth in net profit and maintains the rating of “overweight”
The company released the 2022q1 quarterly report. The operating revenue was 7.08 billion yuan, yoy + 24.4%, and the net profit attributable to the parent company was 590 million yuan, yoy + 69.0%, deducting the net profit not attributable to the parent company of 590 million yuan, yoy + 156.6%. The difference between the net profit deducted and the net profit attributable to the parent company was mainly due to the reduction of government subsidies included in other income. Considering that the company is driven by the demand of core customers aiot and develops high growth segments such as automotive electronics and servers, we maintain the profit forecast. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 3.96/43.0/4.75 billion, corresponding to EPS of RMB 1.70/1.85/2.05, and the current share price corresponding to PE of 17.3/15.9/14.4 times, maintaining the “overweight” rating.
Core customer orders boosted the traditional off-season crop turnover rate, effectively controlled costs and achieved high-level profit growth
The growth of miniled orders and MSAP orders of the company’s core customers promoted the year-on-year growth of operating revenue. The company’s fixed assets in 2022q1 amounted to 14.96 billion yuan, and the fixed assets were mainly machinery and equipment (refer to the annual report of 2021. Machinery and equipment accounted for 57.8% of the fixed assets and the depreciation period was 2-10 years). The depreciation expense had a great impact on the operating cost. The company increased the production capacity growth rate through customer orders, superimposed the yield of miniled high-grade HDI products and MSAP products, and the gross profit margin of the company reached 19.8%, down only 1.0pct compared with Q4, The difference in gross profit margin between the first quarter and the fourth quarter of the previous year is less than that in previous years. The company’s sales expenses fell significantly due to the adjustment of transportation costs. In 2022q1, it reached 38 million yuan, yoy-48.6%, management expenses 268 million yuan, yoy-6.5%, with a steady decline, net interest rate of 8.4%, yoy + 2.2pct. The capital expenditure of 2022q1 company is 1.12 billion yuan.
The hard board business has accumulated a lot, and the transfer of the controlling shares of Sanying precision and Sanying precision is expected to increase the investment income
The volume of the company’s operating revenue has ranked first in the world for four consecutive years. The company’s PCB product process is at the leading level in the world. It has formed the mass production capacity of the next generation PCB product SLP representing higher-level process requirements, and arranged the new products of customers in the next three years in advance. The company’s automobile and server products will become an important growth point in the future. In 2022q1, the company holds 3.7% equity of Sanying precision through transfer, and its main business is R & D, manufacturing and sales of X-ray three-dimensional micro CT equipment; It has obtained 5.2% of the equity of Sanying fine control. Sanying fine control’s main business is the R & D, manufacturing and sales of nano motion control platform and system, which is expected to increase investment income.
Risk tips: fluctuations in orders of key customers, the impact of the exchange rate of RMB against the US dollar, the import of HDI business is less than expected, and the competition of automobile board is intensified
