\u3000\u30 Shenzhen Zhenye(Group)Co.Ltd(000006) 82 Dongfang Electronics Co.Ltd(000682) )
Event overview
On April 28, 2022, the company disclosed the first quarterly report of 2022. In the first quarter of 2022, the company realized an operating revenue of 944 million yuan, a year-on-year increase of 24.95%; The net profit attributable to the parent company was 607956 million yuan, a year-on-year increase of 24.17%; The net profit deducted from non parent company was 547882 million yuan, with a year-on-year increase of 20.60%.
Analysis and judgment:
Q1 is in line with expectations and its profitability is stable
In the first quarter, the company's revenue increased synchronously with its parent company, with a growth rate of more than 24%. The overall growth rate was fast, which was in line with our expectations. Despite the disturbance of the epidemic, the company continued its growth momentum. The overall cost and expense rate are well controlled. The gross profit margin of Q1 sales / net profit margin attributable to parent company are 31.58% / 6.44% respectively, which are better than the same period last year. The balance of contract liabilities at the end of the first quarter was 1.861 billion, an increase of about 200 million (+ 12%) over the balance at the beginning of the year, indicating that there is no worry about orders on hand. The contribution of non recurring profit and loss to net profit is 6.074 million yuan, mainly from government subsidy income; About 6.5762 million yuan in the same period last year.
Weston, a subsidiary, performed well in the beginning of the year and won two net orders in a row
In the bidding of Sinolink and Sinolink. According to the company's official account, in January, in the second batch of framework bidding projects of China Southern Power Grid in 2021 for metering products, Weston won the bid with a bid amount of 127.7 million yuan. The self-developed China Southern Power Grid new specification single-phase smart watt hour meter and three-phase smart watt hour meter passed the test at one time and won the bid. In March, the company won the bid of 107 million yuan in the third batch of new procurement of State Grid Corporation of China in 2022, and the bid winning amount ranked third. The growth rate of smart meter business was optimistic throughout the year. In addition, the company actively carried out new business. In January, the Wanhua Chemical Group Co.Ltd(600309) global R & D center built by Weston was successfully connected to the grid, representing a breakthrough in the company's first new energy project in the chemical industry.
The investment in power grid has accelerated and the industry is booming. It is expected that the company will maintain a high growth rate throughout the year
This year's power grid investment is expected to hit a record high. In November 2021, China Southern Power Grid Corporation issued the power grid development plan of China Southern Power Grid during the 14th Five Year Plan period, proposing that the planned investment during the 14th Five Year Plan period will be about 670 billion yuan, a year-on-year increase of 36% compared with the 13th Five Year Plan period. On January 13, 2022, the State Grid Corporation of China held an annual working meeting. It is planned that the power grid investment in 2022 will reach 501.2 billion yuan, which is the first time that the annual power grid investment plan of the State Grid Corporation of China has exceeded 500 billion yuan, a record high, with a year-on-year increase of 8.84%. At the 11th meeting of the central financial and Economic Commission held on April 26, the general secretary stressed the need to strengthen the construction of energy infrastructure and strive to improve network efficiency; Develop distributed smart grid. We believe that the company has a comprehensive business layout, covering all links of power generation, transmission, transformation and distribution, and is the invisible champion in the field of smart grid; In the context of dual carbon and new power system, there are structural growth opportunities in advantageous fields such as company dispatching, distribution network and electricity meter; It is expected to maintain a high growth rate throughout the year.
Investment advice
The company's business products are fully benchmarked with Nari. During the 14th Five Year Plan period, with the increased and accelerated investment of State Grid and South grid, we believe that the company's performance will continue to grow. To maintain the profit forecast in the comments of the company's 2021 annual report, we give the revenue forecast of 5.34/66.1/8.19 billion yuan for 22-24 years, the net profit attributable to the parent company forecast of 452 / 625 / 805 million yuan for 22-24 years, and the earnings per share (EPS) forecast of 0.34/0.47/0.60 yuan, corresponding to the closing price of 5.06 yuan / share on April 28, 2022. PE is 15 / 11 / 8 times respectively. It is strongly recommended to maintain the "buy" rating.
Risk tips
1) market share is squeezed by competitors; 2) The investment of State Grid and South grid is less than expected; 3) New business expansion is less than expected; 4) Systemic risks caused by economic downturn; 5) Manage risk.
