\u3000\u3 Shengda Resources Co.Ltd(000603) 638 Yantai Eddie Precision Machinery Co.Ltd(603638) )
Key points
The performance is affected by the decline of industry demand and the rise of raw material prices
Yantai Eddie Precision Machinery Co.Ltd(603638) in 2021, the operating revenue reached 2.68 billion yuan, with a year-on-year increase of 19.0%; The net profit attributable to the parent company was 470 million yuan, a year-on-year decrease of 9.0%; Earnings per share is 0.56 yuan. The net cash flow from operating activities was 210 million yuan, a year-on-year decrease of 38.0%. The company’s gross profit margin in 2021 was 33.8%, down 6.9 percentage points year-on-year, mainly due to the sharp rise in the price of raw materials; The net interest rate was 17.5%, down 5.4 percentage points year-on-year. Due to the impact of the downward demand of the construction machinery industry, the company achieved an operating revenue of 620 million yuan in the first quarter of 2022, a year-on-year decrease of 31.2%; The net profit attributable to the parent company was 70 million yuan, a year-on-year decrease of 63.1%.
The crushing hammer business fluctuates with the industry, and the hydraulic parts business continues to grow at a high rate
In 2021, the company’s crushing hammer business realized a revenue of 1.11 billion yuan, a year-on-year decrease of 13.4%. The company is market-oriented, increases product differentiation advantages, consolidates the market share of light and medium-sized hydraulic crushing hammers, and focuses on strengthening the R & D and production of heavy hydraulic crushing hammers. In 2021, the company’s hydraulic parts business realized a revenue of 1.52 billion yuan, with a significant year-on-year increase of 61.4%. In the host market, the company vigorously expands new customers, establishes and improves the terminal sales service network and increases the number of large customers by further strengthening the cooperation with the host factory. In the after-sales market of hydraulic parts, based on brand building, the company expands the market sales share by improving the team management and market operation level of channels and dealers. In the export market, the company attracts more overseas sales customers through product customization and services to disperse trade policy risks.
Continue to promote new product research and development
In 2021, the company’s R & D expense rate continued to rise to 5.0%. The company further improves basic technology research, with the R & D goal of improving added value and high-tech products; Further develop new product lines and establish a special R & D team for the R & D of industrial multi axis Siasun Robot&Automation Co.Ltd(300024) and the R & D of cemented carbide products such as blades, cutters and tool handles, so as to further improve the R & D and technology of the company and enrich the product series. In the field of hydraulic parts, the company has strengthened the R & D of various products and made every effort to develop a full range of hydraulic parts for excavators, aerial work platforms, rotary drilling rigs and loaders, so as to lay a good foundation for the full range of high-end hydraulic parts in the future.
Maintain the “overweight” rating
Based on the dual impact of the decline in industry demand and the sharp rise in raw material prices on revenue and profit margin, we lowered the company’s 22-23 year net profit forecast by 56.5% / 55.3% to 360 / 440 million yuan, and introduced a 24-year net profit forecast of 530 million yuan, corresponding to EPS of 0.42/0.52/0.63 yuan in 22-24 years. The company benefited from the general trend of localization of hydraulic parts, maintained high growth of hydraulic parts business and maintained the “overweight” rating of the company.
Risk warning: downstream boom and downside risk; The risk of intensified industry competition; Customer development is less than expected risk; Raw material price fluctuation risk
