\u3000\u3 Jiangsu Eastern Shenghong Co.Ltd(000301) 030 Suzhou Shijing Environmental Technology Co.Ltd(301030) )
Key investment points
Event: in 2021, the company realized an operating revenue of 795 million yuan, an increase of 18.89% at the same time; The net profit attributable to the parent company was 58 million yuan, with a decrease of 5.24%; Deduction of non RMB 46 million, with a decrease of 22.36%, lower than our expectation. In the first quarter of 2022, the company realized an operating revenue of 288 million yuan, an increase of 174.31% at the same time; The net profit attributable to the parent company was 13 million yuan, an increase of 46.33% at the same time; Deduct the net profit not attributable to the parent company of 07 million yuan, with a decrease of 13.86%.
The pan semiconductor sector continues to account for a high proportion, the cement sector develops rapidly, and the rising cost affects the gross profit margin. Affected by the fluctuation of macroeconomic environment, repeated epidemics and the rise of raw material prices, the company's comprehensive gross profit margin decreased by 3.45pct to 27.41% in 2021. By industry: 1) the prosperity of the pan semiconductor sector continued: the revenue was 592 million yuan, an increase of 13.86%, accounting for 74.47% of the total revenue, and the gross profit margin was 29.81%, a decrease of 3.06 PCT. The photovoltaic process management equipment is still the main source of revenue of the company, growing rapidly under the high prosperity of the photovoltaic industry. The revenue of the company doubled in 2022q1, which is mainly contributed by the revenue recognized by the orders of the photovoltaic sector. 2) The cement sector developed rapidly: the revenue was 81 million yuan, an increase of 173.44% at the same time, accounting for 10.20% of the total revenue. It quickly became the second largest source of revenue of the company, with a gross profit margin of 19.21% and a decrease of 13.18 PCT at the same time. 3) New carbon sector: the revenue is 38 million yuan, which is the new business in 2021. 4) Other industries: steel, fine chemicals, automobile manufacturing and other sectors achieved revenue of 23 / 07 / 08 million yuan respectively, accounting for 2.95%, 0.84% and 1.01% of the company's total revenue.
The expenditure of purchase money & salary expenses increased, and the cash flow pressure was great. 1) In 2021, the net cash flow of the company's operating activities was - 210 million yuan, a decrease of 915.64% at the same time, mainly due to the rapid growth of the company's orders and the increase in the payment of procurement funds and payroll expenses; 2) Net cash flow from investing activities was - 19 million yuan, with a decrease of 103.89%; 3) The net cash flow from financing activities was 320 million yuan, an increase of 455497%, mainly from the net funds raised by the company's listing of 142 million yuan and bank loans.
As the leader of pollution prevention and control equipment in photovoltaic process, the unit volume value is expected to increase and the growth is accelerated. The company consolidates the leading position of photovoltaic process treatment equipment by virtue of brand, technology and cost advantages, and is expected to copy the advantages of waste gas equipment to the comprehensive supporting system in the future. In 2021, the company won the bid of 200 million yuan / 310 million yuan successively, and the large single verification mode of comprehensive supporting equipment has changed. The volume value of single GW of comprehensive supporting equipment system can reach 50-60 million, which has 5-11 times the investment of waste gas equipment.
The transformation of ultra-low emission cement welcomes opportunities, and the cooperation between China and building materials is advancing steadily. The ultra-low emission transformation of the cement industry releases the demand for end-of-life treatment. In 2019, the company signed a strategic cooperation agreement of 7.6 billion yuan with China building materials. By the end of 2021, the contract amount has been fulfilled is 121 million yuan, and the new signing of cement is expected to accelerate.
Profit forecast and investment rating: the new energy revolution drives the expansion of photovoltaic capacity and releases the demand for process governance. The company is the leader of photovoltaic process pollution prevention and control equipment, and the expansion of Integration & new fields helps the growth. We maintain the company's net profit attributable to the parent company of 120 / 186 million yuan from 2022 to 2023. It is expected that the net profit attributable to the parent company will be 270 million yuan in 2024, corresponding to 25, 16 and 11 times PE, maintaining the "buy" rating.
Risk tip: orders are not as expected, R & D risks, and industry competition intensifies
