\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 87 Anhui Zhongding Sealing Parts Co.Ltd(000887) )
Performance review
On April 29, 2022, the company released the annual report of 21 years and the first quarterly report of 2022. 1) In 2021, the company achieved a revenue of 12.577 billion yuan, a year-on-year increase of + 8.91%; The net profit attributable to the parent company was 965 million yuan, a year-on-year increase of + 95.96%. 2) 22q1, the company achieved a revenue of 3.359 billion yuan, a year-on-year increase of + 5.1%; The net profit attributable to the parent company was 251 million yuan, a year-on-year increase of + 5.56%. The performance is in line with expectations.
Business analysis
The performance is in line with expectations, with steady growth and toughness. 1) The revenue of cooling system was 3.3 billion yuan, with a year-on-year increase of + 9% and a gross profit margin of 26%, an increase of 8pct, mainly due to the improvement of overseas operations; 2) The air suspension revenue was 600 million yuan, with a year-on-year increase of – 19% and a gross profit margin of 17%, an increase of 5pct, mainly due to the large-scale effect; 3) The lightweight revenue was 800 million yuan, with a year-on-year increase of + 79% and a gross profit margin of 16%, with a decrease of 7pct, mainly due to the price fluctuation of raw materials; 4) The revenue of sealing system was 3.1 billion yuan, with a year-on-year increase of + 10% and a gross profit margin of 28%, an increase of 1PCT; 5) The revenue of rubber business was 2.8 billion yuan, with a year-on-year increase of + 24% and a gross profit margin of 20%. In addition, in 22q1, the company realized a net profit attributable to the parent company of 251 million yuan, a year-on-year increase of + 6% and a month on month increase of + 71%.
The cost decreased during the period. 1q22’s expense rate during the period was 13.47%, a change of -2.24pct compared with the same period last year, mainly due to the decrease in net exchange loss caused by exchange rate changes. Among them, sales / management / finance were 2.64% / 10.14% / 0.69% respectively, with a change of -0.68 / -0.73 / -0.83pct respectively compared with the same period last year.
The company is a scarce target with high short-term cashability and long-term logical smoothness of intelligent track. The trend of air suspension standard configuration is clear. In the future, with the lower cost of core components and the upper configuration of Chinese models, the air suspension penetration rate is expected to continue to increase. AMK localization of the company has been successfully implemented, and the product cost is expected to be reduced by more than 20%, so as to further enhance the product cost advantage. According to the current orders, the market share of the company’s air compressor products has reached more than 70%. In the future, we will expand air springs and other products to improve the value of products supplied.
Profit adjustment and investment suggestions
We expect the company to achieve net profits of 1.130 billion yuan, 1.469 billion yuan and 1.957 billion yuan from 2022 to 2024, with a year-on-year increase of 17%, 30% and 33% respectively. The current share price corresponds to 14, 11 and 8 times of PE in the three years, maintaining the “overweight” rating.
Risk tips
Car sales outside China were lower than expected; Car sales outside China were lower than expected; The company’s customer expansion is less than expected; The improvement of the company’s overseas business is less than expected; Goodwill impairment risk; RMB exchange rate fluctuations.
