\u3000\u3 Guocheng Mining Co.Ltd(000688) 155 Shanghai Sk Automation Technology Co.Ltd(688155) )
Event: on the evening of April 29, 2022, the company released the first quarterly report of 2022.
Key investment points
The high growth of revenue and the advance of rapid production expansion expenses put pressure on the short-term net profit: 2022q1 company realized an operating revenue of 291 million yuan, a year-on-year increase of + 93%; The net profit attributable to the parent company was 21 million yuan, a year-on-year increase of + 20%; The net profit deducted from non parent company was RMB 08 million, a year-on-year increase of – 33%. Benefiting from the rapid expansion of power battery factory and the gradual confirmation of on-hand orders, the company’s revenue increased rapidly; The company’s total capacity is expected to reach 20.22 billion square meters due to the rapid expansion of the high-speed plant, with a total capacity of 20.22 billion square meters, and the total net profit is expected to reach 20.22 billion square meters by the end of the year. We believe that in the future, with the gradual release of the production capacity of the new plant, the company will return to a reasonable profit level under the scale effect and meet the performance release period.
During the period driven by scale growth, the expense rate decreased and the profitability was waiting to be repaired: the gross profit margin of the company in 2022q1 was 23.7%, year-on-year -9pct, month on month + 2pct; The net interest rate was 6.7%, year-on-year -5pct, month on month + 7pct. In the future, with the improvement of the bargaining power of the company’s highly automated production line, the company’s gross profit margin is expected to usher in an inflection point. Driven by the growth of scale, the expense rate during the period decreased. The expense rate during the period was 22.2%, with a year-on-year rate of -0.6pct, of which the sales expense rate was 1.7%, with a year-on-year rate of -0.6pct, the management expense rate (including R & D) was 20.5%, with a year-on-year rate of + 0.5pct, and the financial expense rate was -0.03%, with a year-on-year rate of -0.5pct.
Contract liabilities & inventories increased significantly, and orders were sufficient to ensure the certainty of performance: as of 2022q1, the company’s contract liabilities were 237 million yuan, a year-on-year increase of + 409%; The inventory was 396 million yuan, a year-on-year increase of + 160%, indicating that the company had sufficient orders, and the new orders signed by the company reached 2.1 billion yuan in 2021; On April 6, 2022, the company again announced a large order of 30075 million yuan (excluding tax). The net cash flow from operating activities in 2022q1 was -83 million yuan, which was mainly due to the increase in the number of employees caused by the expansion, resulting in a large increase in salaries and expenses. In order to match the company’s capacity expansion, the number of employees of the company exceeded 3000 by the end of March 2022.
It plans to acquire Ningde Dongheng machinery to expand product categories & deepen Ningde cooperation: Xianhui plans to acquire 51% equity of Ningde Dongheng Machinery Co., Ltd. and cut into the lithium battery module structure business to form a two wheel drive product layout of “lithium battery module structure + automation production line”, so as to further highlight the advantages of automation; At the same time, it will help to further deepen the cooperative relationship between Xianhui and Ningde.
Profit forecast and investment rating: the company’s production capacity is expanding rapidly. We maintain the company’s net profit attributable to the parent company from 2022 to 2024 at RMB 197 / 315 / 470 million. The current stock price corresponds to dynamic pe28 / 18 / 12 times, maintaining the rating of “overweight”.
Risk tip: the sales volume of new energy vehicles is lower than expected; The improvement of automation rate of module + pack line is lower than expected.
