\u3000\u3 Shengda Resources Co.Ltd(000603) 338 Zhejiang Dingli Machinery Co.Ltd(603338) )
Event: the company released the annual report of 2021 and the first quarterly report of 2022.
Rapid expansion of overseas market & large volume of arm products and rapid growth of revenue
In 2021, the company achieved a revenue of 4.939 billion yuan, with a year-on-year increase of 67.05%, which is basically in line with our expectations. The rapid growth of revenue is mainly due to the mitigation of the impact of the epidemic in overseas markets in 2021, the recovery of customer procurement demand, the company’s continuous expansion of overseas markets by making full use of existing advantages and resources, and the rapid volume of arm products. ① In terms of sub regions, in 2021, the main business income in the Chinese market was 2.777 billion yuan, with a year-on-year increase of 36.86%. The main business income in the overseas market was 1.979 billion yuan, with a year-on-year increase of 149.44%. The sales accounted for 41.61%, with a year-on-year increase of + 13.50pct. ② In terms of products, in 2021, the company’s revenue from arm products was 1.645 billion yuan, a year-on-year increase of 191.00%, accounting for 34.61% of the main business revenue, a year-on-year increase of + 14.57 PCT, the revenue from scissor products was 2.847 billion yuan, a year-on-year increase of 32.21%, and the revenue from mast products was 263 million yuan, a year-on-year increase of 153.95%. In 2022q1, the company achieved a revenue of 1.253 billion yuan, a year-on-year increase of 48.97%, continuing a high growth rate. On the one hand, the high-altitude operation platform industry is highly prosperous, on the other hand, the company actively explored the market outside China, and the product sales increased rapidly. Looking forward to 2022, with the continuous opening of overseas markets, the revenue side is expected to continue its strong performance.
The increase in the proportion of arm type has lowered the overall gross profit level, and the profitability of the company has declined
In 2021, the company realized a net profit attributable to the parent company of 884 million yuan, with a year-on-year increase of 33.17%, lower than the growth rate of revenue. In 2021, the company’s net sales interest rate was 17.91%, with a year-on-year decrease of -4.55 PCT, and its profitability declined to a certain extent. ① On the gross profit side, the overall gross profit margin of the company was 29.34% in 2021, with a year-on-year decrease of -5.57pct. The decline in gross profit margin was the core factor for the decline in net profit margin. In 2021, the gross profit margins of arm type, scissor type and mast type products were 18.16%, 32.48% and 38.36% respectively, with a year-on-year decrease of -0.88pct, -3.76pct and -8.70pct respectively. The decline in gross profit margin of each product was mainly due to the rise of raw materials and the increase of sea freight, The decline of the company’s overall gross profit margin is mainly due to the significant increase in the proportion of arm products with low gross profit margin. ② On the expense side, the expense rate of the company during 2021 was 8.57%, with a year-on-year rate of -1.85pct. The sales, management (including R & D) and financial expense rates were -1.13pct, -0.55pct and -0.17pct respectively year-on-year. The decline of various expense rates was mainly due to the scale effect.
In 2022q1, the company realized a net profit attributable to the parent company of 196 million yuan, with a year-on-year increase of 15.07%, which is basically in line with our expectations. The net profit margin of 2022q1 sales was 15.62%, with a year-on-year increase of -4.6pct, which also decreased compared with the profit level of 2021: on the one hand, the gross profit margin of 2022q1 sales was 29.20%, with a year-on-year increase of -0.83pct; On the other hand, the expense rate during 2022q1 was 10.09%, with a year-on-year increase of + 3.19pct, mainly due to exchange losses, and the financial expense rate was + 2.40pct year-on-year.
Dual opposition companies have limited influence in exploring overseas markets, and the fixed increase and expansion of production opens up room for growth
① the U.S. Department of Commerce has announced the final findings of the countervailing and anti-dumping investigation on the mobile lifting operation platform imported from China: the applicable countervailing tax rate of the company is 11.95%, and the anti-dumping tax rate is 31.54%. The double anti landing will cause certain disadvantages to the company in the short term, have a greater impact on enterprises that are not competitive and rely on low price competition, raise the threshold for entering the U.S. market, and help leading enterprises such as the company to obtain more market share. ② In 2021, the company plans to increase the annual output of 4000 large-scale intelligent high-altitude platforms, which is expected to solve the capacity bottleneck and open up the growth space of the company.
Profit forecast and investment rating: considering the impact of epidemic and other factors, we expect the net profit attributable to the parent company from 2022 to 2024 to be 1.155 (former value of 1.173 billion yuan), 1.380 (former value of 1.409 billion yuan) and 1.663 billion yuan respectively, and the corresponding dynamic PE of the current stock price is 16 / 14 / 11 times respectively. Considering the rapid growth of the company’s performance and good growth, the “buy” rating is maintained.
Risk tips: market competition intensifies, product prices drop sharply, and the sales of arm products are less than expected.
