\u3000\u3 Guocheng Mining Co.Ltd(000688) 296 Zhejiang Heda Technology Co.Ltd(688296) )
Event overview
Recently, Zhejiang Heda Technology Co.Ltd(688296) successively released the 2021 annual report and the first quarter report of 2022. The company's total operating revenue in 2021 was 507 million yuan, a year-on-year increase of 39.61%, the net profit attributable to the parent was 100 million yuan, a year-on-year increase of 32.41%, and the net profit not attributable to the parent was 82 million yuan, a year-on-year increase of 14.10%. Under the background of national digital reform and water conservation and energy conservation, the digital transformation of the water industry has accelerated, benefiting from the development of the water information market and the competitive advantages of the company's products, the business scale has maintained rapid growth, and the annual operating revenue has achieved rapid growth.
In 2022q1, the company achieved a total operating revenue of 66 million yuan, an increase of 54.78% year-on-year, and the net profit attributable to the parent company was -2.229 million yuan, an increase of 61.79% year-on-year, deducting the net profit not attributable to the parent company of -2.554 million yuan, an increase of 64.54% year-on-year. In addition, Zhejiang Heda Technology Co.Ltd(688296) in the first quarter, R & D expenses and sales expenses increased by 31.24% and 56.14% year-on-year, indicating that the company's investment in R & D, sales and personnel has continued since last year; The net cash flow from operating activities increased by 7.21% year-on-year, mainly due to the acquisition of more orders with strong comprehensiveness, high system requirements and long project cycle with the expansion of the company's business scale. Often, the collection cycle of such projects is long. Therefore, the overall settlement speed of accounts receivable of the company has slowed down and the collection efficiency has decreased.
Industry digital transformation wave superimposed policy driven
In 2021, benefiting from the establishment of the goal of building a water-saving society, the national pilot of water supply network leakage control and the outbreak of the demand for digital and intelligent management in the water industry, the characteristics of the information technology enabled water industry represented by artificial intelligence, big data and the Internet of things are more obvious, and the application of water informatization construction is accelerated. According to the disclosure of the company's annual report, the statistics of the prospective industry research institute show that the investment scale of China's smart water industry will reach 12.5 billion yuan in 2020, and the investment scale is expected to reach 37 billion yuan in 2026, with a compound annual growth rate of 19.83%.
The measures for the administration of urban water supply price issued in 2021 proposed for the first time that the information construction cost should be included in the cost as the amortization of intangible assets. At the same time, the leakage rate should refer to the leakage control and evaluation standard of urban water supply network, and those higher than 10% should not be included in the cost. In mid March 2022, the Ministry of housing and urban rural development and the national development and Reform Commission jointly issued the notice on strengthening the leakage control of public water supply network and the notice on organizing the pilot construction of leakage control of public water supply network, which required that the leakage rate of urban public water supply network should be controlled within 9% by 2025, and clearly proposed to invest in and support the pilot construction of leakage control of public water supply network within the central budget, Select no more than 50 built-up areas of cities (counties) with good demonstration and promotion significance to carry out the pilot.
Increase research and development, expand new products, strengthen sales and obtain large orders
In 2021, the company continued to increase R & D investment, with a total R & D cost of 633215 million yuan, a year-on-year increase of 62.66%; By the end of 2021, the company had 558 R & D personnel and technicians, accounting for 73.04% of the total number of employees. The company has set up software R & D centers in Shenzhen and Jinan to strengthen the R & D team of smart water SaaS cloud platform and water marketing service system. In 2021, Heda independently developed and launched new software and hardware products such as geographic information system (GIS), intelligent pressure management valve and intelligent correlator, and approved the intelligent drainage liquid level monitoring terminal project, pipe network leakage detection correlator project and intelligent fire hydrant leakage series solution project, which have successfully entered the testing stage. The new products have high technical barriers and will further expand the company's product line, Improve the core competitiveness of the company.
In order to meet the strong demand for information construction in the water industry nationwide, the company established sales offices in Beijing, Shanxi and Chongqing in 2021, and the market expansion area was further expanded; At the same time, the channel department is set up to screen the core agents in the water industry, build the first RTU product agent team, and further promote the company's products and services. According to the company's announcement, with the support of self-developed software and hardware products and continuously strengthened sales channels, Heda successively won the "sewage pipe network intelligent sensing system project of Jiaxing Economic and Technological Development Zone", with an amount of 15.68 million yuan; "Smart water project of Huangyan District rural drinking water standard raising (water supply integration) EPC project", with an amount of 23.508 million yuan; Yancheng "construction project of integrated operation and supervision platform for urban sewage treatment facilities", with an amount of 12.2 million yuan; "Shaoxing urban water supply intelligent construction pilot project - special project for leakage control of urban water supply pipe network", with an amount of 638222 million yuan and many other large projects. The company's comprehensive strength such as market promotion, product competitiveness and implementation and delivery has been recognized by the market.
Build a good ecological environment and face the multi-dimensional layout of the future
Facing the future, the company will follow the goal guidance of national leakage control and energy conservation and water saving, take "smart IOT and smart water" as the development strategy, take the integrated solution as the starting point, create ecological and enabling channels, and support customers in water supply, drainage, water conservancy, enterprises and parks to carry out digital transformation. In 2021, the company fully entered the field of secondary water supply and established Zhejiang Jiayuan Heda water affairs Co., Ltd., a comprehensive service provider for the whole process design, construction, operation and training management of secondary water supply, with Zhejiang Jiayuan environment group, which is committed to building Jiaxing into a benchmark and model of national secondary water supply.
In 2022, the company will also take the corresponding national policy call to promote the contract water-saving mode, summarize the experience and practice of Shaoxing water in the leakage control of urban water supply network in the past ten years, and promote and copy the leakage control business to the national water industry in combination with Zhejiang Heda Technology Co.Ltd(688296) 's integrated intelligent water software and hardware solution; Previously, the company has carried out contracted water-saving mode services in Dalian, Guangzhou and other places. In addition, the company's rural drinking water centralized water supply station and rural water supply unified information management and control platform will continue to be promoted, and platform products such as Yinuo digital assistant, measurement cloud and smart water SaaS cloud platform will continue to provide customers with efficient overall solutions for data perception, transmission, analysis and use.
Investment advice
The company is a leading enterprise in the field of water informatization. Benefiting from the needs of water group to reduce leakage and the medium and long-term construction needs of smart water, the company has high growth. It is estimated that the revenue growth rate of the company from 2022 to 2024 will be 43.7% / 42.7% / 33.4% respectively, and the growth rate of net profit attributable to the parent company will be 29.4% / 28.3% / 32.1% respectively. Maintain the Buy-A investment rating and give a six-month target price of 30.25 yuan, equivalent to 25 times the dynamic P / E ratio in 2022.
Risk warning: the research and development of core technology is not as expected; Product promotion and industrial ecological construction were not as expected.
