\u3000\u30 China Baoan Group Co.Ltd(000009) 21 Hisense Home Appliances Group Co.Ltd(000921) )
Event: Recently, the company released the first quarter report of 2022.
In the first quarter of 2022, the company achieved a total operating revenue of 18.304 billion yuan, a year-on-year increase of 31.35%; The net profit attributable to the parent company was 266 million yuan, a year-on-year increase of 22.1%; The net profit attributable to the parent company after deduction was 186 million yuan, a year-on-year increase of 39.46%. At the end of the reporting period, the basic earnings per share was 0.2 yuan / share, with a year-on-year increase of 25.0%; The weighted average return on net assets was 2.54%, an increase of 0.33 percentage points year-on-year. As the leading enterprise in China’s white power industry, the company actively promotes business differentiation and diversified development, and relies on product and channel advantages to steadily improve its market competitiveness at home and abroad.
Key investment points:
The growth rate of advantageous air conditioning business is obvious. Benefiting from the continuous optimization of product structure, the improvement of channel sales and the implementation of key market layout strategy, the company’s main air conditioning business has achieved rapid growth. According to the statistical data, the company’s domestic air conditioner export sales in China from January to February 2022 increased by 22.2% / 29.7% year-on-year, significantly better than the industry’s year-on-year growth level of – 4.4% / 4.7%. In addition, during the same period, the company’s sales of multi online central air conditioners in China increased by about 80% year-on-year, which is also higher than the growth rate of 56% in the industry. Considering the continuous improvement of the company’s order increment and marketing ability in 2021 and the synergy of its household and central air conditioning business, it is expected that the revenue of the company’s advantageous air conditioning business will grow steadily.
Profitability improved month on month, and investment income increased significantly. In order to cope with the sharp fluctuation of raw material prices, the company completed the procurement and preparation of finished products required for production before the end of 2021. At the same time, combined with a balanced production strategy, the cost side pressure of the company was effectively relieved. According to the disclosure report, the gross profit margin of the company in 2022q1 was 18.53%, up 3.06pct month on month compared with 2021q4, and the profitability of a single quarter has improved significantly in the past year. On the other hand, benefiting from the consolidated statement of Japan Sandian, the company’s investment income in 2022q1 was 143 million yuan, a year-on-year increase of more than 320%. In the current development environment of automobile electrification, the traditional on-board air conditioning system is facing upgrading. The company has a long-term layout, holding the leading three power companies in the automobile compressor industry, and successfully entered the automobile thermal management track. With its rich customer resources and leading market share in the world, with the gradual deepening of cooperation, the company is expected to open a new growth curve and share the rapid growth dividend of the new energy vehicle industry.
For the first time, give the company an “overweight” investment rating. It is estimated that the company’s diluted EPS from 2022 to 2024 will be RMB 0.98/1.03/1.16 respectively. Calculated according to the closing price of RMB 11.11 on April 28, the corresponding PE will be 11.4/10.8/9.6 times. With the steady progress of the company’s diversified layout, based on the advantages of traditional white power and central air conditioning business, the company actively expanded the heat management business of new energy vehicles, and multi wheel drive boosted the steady growth of the company’s revenue. At the same time, considering the subsequent performance turnaround of Japan’s three power and the gradual easing of cost side pressure under the company’s efficient production and operation strategy, the profitability is expected to continue to be repaired and improved in the future. Therefore, through comprehensive analysis, the company is given an “overweight” investment rating.
Risk warning: market competition intensifies the risk; Risk of sharp fluctuations in raw material prices and exchange rates; The recovery of the real estate market is less than the expected risk
