\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 416 Xiangtan Electric Manufacturing Co.Ltd(600416) )
Event: the company released the first quarterly report of 2022. In 2022q1, the company achieved a revenue of 1.046 billion yuan, a year-on-year increase of – 10.26% and a month on month increase of + 3%; The net profit attributable to the parent company was 50 million yuan, with a year-on-year increase of + 65.03% and a month on month increase of + 128186%; Net profit deducted from non parent company was 45 million yuan, with a year-on-year increase of + 53.35% and a month on month increase of + 295.65%.
In 2022q1, the net profit attributable to the parent company increased significantly year-on-year and month on month, contributing to the best performance in history, mainly due to the double inflection point of industrial trend and mechanism improvement. We believe that, on the one hand, it benefits from the stripping of inefficient assets and the clearing of historical burdens. On the other hand, it is also the external manifestation and result of the new management’s enterprising pioneering spirit and the effective medium and long-term incentive mechanism Xiangtan Electric Manufacturing Co.Ltd(600416) has very scarce and monopoly technologies in the two major technical fields of ship integrated electric propulsion system and special launch, and is at the three inflection points of industrial trend, mechanism improvement and performance growth.
1. Core competitiveness: the company has two core technologies: ship integrated electric propulsion system and special launch. The product technology and manufacturing capacity are in a leading position outside China, and the market share of related products is 100%. The company has won 6 national special awards for scientific and technological progress, 10 first prizes, 13 second prizes and more than 50 ministerial and provincial invention and innovation awards.
2. Inflection point of industrial trend: in cooperation with the team of well-known academicians, the company has gradually transformed a vehicle mounted special equipment system into serialization and industrialization, and the special launch and ship integrated power system has entered the stage of batch ordering. The inflection point of the huge market has come. In terms of ships, there is still a big gap between the total number of Chinese naval ships and the United States. It is expected that the 14th five year plan will enter a new round of ship mass construction, especially the all electric propulsion ship, which is the latest development direction all over the world and may usher in a large-scale application stage; In terms of on-board special launch system, the company has issued a fixed increase scheme to make positive preparations for the mass production and industrialization of the system; In terms of civil all electric ships, the DC integrated power system of diep-4 123.8m coastal self unloading ship has been successfully offline; The wheel energy storage device has also been installed and debugged at wannianquan Road Station of Qingdao Metro Line 3, and has been successfully connected to the grid. The inflection point of industrial trend is very clear.
3. Inflection point of mechanism improvement: the medium and long-term reward management measures have been issued in 2021. The reward goal is to take the net profit achieved in the highest year in history (217 million yuan) as the reference base for the first implementation of the reward. When the actual annual profit exceeds the base, the medium and long-term reward can be implemented, which is a positive cycle. Therefore, the management mechanism of Xiangdian has been straightened out and the performance release can be expected.
4. Inflection point of high performance growth: industrial trend and mechanism improvement are the core drivers of high performance growth of the company. From the perspective of orders, in the first quarter, the low-voltage motor division won the bid for more than 20 wind power auxiliary equipment supporting projects such as yaw motor, pitch motor and cooler motor, and the number and amount of contract units increased by 53% year-on-year; The orders of the electrical transmission division increased by 3 times year-on-year; In the first quarter, the structural parts division doubled the number of new orders year-on-year; The main business income and profit of kinetic energy division have increased by more than 30%. From the perspective of management, the company comprehensively focuses on the main business of “three electricity”, highlights technology guidance, strengthens market development, pays close attention to production organization, and implements various measures such as reducing cost and increasing profit and reducing pressure. The increment of orders has been greatly increased, the superposition management mechanism has been improved, and the company’s performance is expected to start from the first quarter and open the road of high growth quarter by quarter.
Investment strategy: the company has stripped off loss making assets such as Xiangdian wind energy. In terms of multiple inflection points such as industrial trend and mechanism improvement, we believe that Xiangdian’s performance can grow continuously and high. This year’s Xiangdian is different from any time in the past. It will lead the rise of ship comprehensive electric propulsion and electromagnetic energy. Any equipment landing can bring huge performance flexibility. We expect the net profit attributable to the parent company from 2022 to 2024 to be 349 million yuan, 650 million yuan and 1012 million yuan respectively, corresponding to 43x, 23x and 15x PE, maintaining the “buy” rating.
Risk tip: the price of raw materials rises and the batch production of military products is less than expected.
