\u3000\u3 China Vanke Co.Ltd(000002) 126 Zhejiang Yinlun Machinery Co.Ltd(002126) )
Event:
Zhejiang Yinlun Machinery Co.Ltd(002126) released the first quarterly report of 2022: during the reporting period, the company achieved an operating revenue of 2.055 billion yuan, a year-on-year increase of + 2.77% and a month on month increase of + 3.53%; The net profit attributable to shareholders of listed companies was 70 million yuan, with a year-on-year increase of – 33.22% and a month on month increase of + 1300%.
Key investment points:
The cost control effect is good and the profitability is improved significantly. During the reporting period, the company’s gross profit margin was 19.24%, year-on-year -2.15pct, month on month -0.49pct; The net interest rate was 4.23%, year-on-year -1.76pct, month on month + 3.55pct. On a year-on-year basis, due to the epidemic in Shanghai, the significant decline in the production and sales of commercial vehicles and the rise in the prices of raw materials and sea freight, the pressure on profitability is still on; On a month on month basis, the company’s fee control effect was good during the reporting period, with sales expenses of 3.60% and – 2.80% on a month on month basis, and its profitability was significantly improved on a month on month basis.
Increase R & D investment, expand thermal management system, and layout sea breeze and hydrogen fuel cell. In 2021, the company’s R & D expenditure was 326 million yuan, a year-on-year increase of + 21.19%, mainly invested in 15 research projects, of which 6 were related to the thermal management system of new energy vehicles, including heat pump air conditioning, integrated module, electronic water valve, front-end cooling, etc. The first three have completed R & D and entered the stage of mass production or production preparation. It is expected to continue to expand the company’s new energy vehicle thermal management business and improve the company’s profitability. At the same time, the company actively deployed emerging fields, covering the research on cooling of offshore wind power transformer and thermal management of hydrogen fuel cell, seeking new growth points to support future business expansion.
The new energy business increased rapidly, and the fund-raising increased in the field of heat management. Yinlun new energy and Shanghai yinlun are two important business entities of the company’s new energy business segment. In 2021, yinlun new energy achieved an operating revenue of 1.048 billion yuan, a year-on-year increase of 223.49%, and realized a net profit attributable to the parent of 44 million yuan, accounting for 20.12% of the total net profit attributable to the parent of the company; Shanghai yinlun achieved an operating revenue of 893 million yuan, a year-on-year increase of 133.25%; The revenue of heat exchanger business was 6.284 billion yuan, a year-on-year increase of + 28.30%. In June 2021, the company issued 700 million yuan of convertible bonds to invest in the field of new energy commercial vehicle thermal management and passenger vehicle heat pump air conditioning. After the completion of the project, the production capacity of 700000 sets of heat pump air conditioning and 850000 sets of battery thermal management system will be formed, and the annual sales revenue will be increased by 973 million yuan.
Actively explore downstream customers and project orders to support the continuous growth of business. The company’s customers include Volvo, Porsche, Weilai, Xiaopeng, Weima, GM, Byd Company Limited(002594) and other well-known OEMs at home and abroad. During the year, the company successively obtained 141 new projects, including air conditioning box assembly of North American new energy benchmark car enterprises, Chongqing Changan Automobile Company Limited(000625) electronic water pump, front-end module and thermal management integration module of new forces of Chinese car making, Volvo car battery cooling version and cooling module, Contemporary Amperex Technology Co.Limited(300750) battery cooling sector, John Deere cooling module, caterpillar cooling module, manhumer oil cooler and Daimler oil cooler assembly. It is estimated that after the above projects are completed, the company’s new annual sales revenue is nearly 4.117 billion yuan, of which the new energy vehicle business accounts for about 48.7%.
Set up financial budget and director compensation incentive scheme to demonstrate the management’s business determination. In the face of the impact of the external environment, the company plans to ensure the operating revenue of 8.8 billion yuan in 2022 and strive to reach 9.2 billion yuan, of which the revenue of new energy products accounts for more than 25%, and strengthen cost control, with the net interest rate increasing by 1-2pct year-on-year. At the same time, adjust the remuneration scheme of directors from focusing on scale to focusing on benefits, and the fixed-point weights of annual net profit, quality guarantee and new projects are 51% / 25% / 24% respectively. This demonstrates the management’s business determination and is conducive to boosting the enthusiasm of the company’s management and achieving the performance target of 2022.
Profit forecast and investment rating are optimistic about the company’s annual new energy business volume and profitability improvement. It is estimated that the company’s main business income from 2022 to 2024 will be RMB 9.2 billion, 10.8 billion and 13.3 billion, with a year-on-year growth rate of 17%, 18% and 22%; The net profit attributable to the parent company was 370 million yuan, 520 million yuan and 750 million yuan, with a year-on-year growth rate of 69%, 40% and 44%. The EPS was 0.47, 0.66 and 0.95 yuan respectively, and the PE corresponding to the current stock price was 18, 13 and 9 times respectively. The valuation was reasonable and maintained the “buy” rating.
Risk Tips 1) the price of raw materials continues to rise; 2) The sales growth of new energy vehicles was lower than expected; 3) Customer expansion is less than expected; 4) New business expansion is less than expected; 5) Export freight rates continued to rise.
