\u3000\u3 Bohai Water Industry Co.Ltd(000605) 123 Wuxi Paike New Materials Technology Co.Ltd(605123) )
Key investment points
Event: the company released the first quarterly report of 2022 on April 29. In the first quarter of 2022, the company achieved a revenue of 611 million yuan, a year-on-year increase of 87.68%, a net profit attributable to the parent company of 107 million yuan, a year-on-year increase of 64.57%, and a deduction of non attributable net profit of 105 million yuan, a year-on-year increase of 74.55%.
The performance of 2022q1 achieved rapid growth, and the rise of raw materials suppressed profits in the short term. On the revenue side, the company achieved a revenue of 611 million yuan, an increase of 87.68% year-on-year and 12.73% month on month. The company's revenue increased rapidly year on year and achieved steady growth month on month. The demand for Aerospace Forgings and petrochemical forgings in the downstream of the company was accelerated. On the profit side, the company realized a net profit attributable to the parent company of 107 million yuan in 2022q1, with a year-on-year increase of 64.57%, a month on month decrease of 4.47%, and a deduction of non attributable net profit of 105 million yuan, with a year-on-year increase of 74.55% and a month on month decrease of 4.72%. The company's profit growth rate is lower than that of revenue, mainly because the rise in raw material prices suppresses profits. In terms of profit margin, the company's gross profit margin was 27.54%, down 3.69pct year-on-year, down 1.46pct compared with last year, and the net profit margin was 17.58%, down 2.47pct year-on-year, up 0.04pct compared with last year. Due to the rise of raw material prices, the company's profit margin fell year-on-year. The company still improved the net profit margin compared with last year by improving its management level.
The three fee rates were well controlled and continued to increase R & D investment. In the first quarter of 2022, the company's three fees accounted for 3.39%, a year-on-year decrease of 2.84pct, of which the sales expense rate, management expense rate and financial expense rate were 1.58% (year-on-year -0.23pct), 1.78% (year-on-year -2.07pct) and 0.03% (year-on-year -0.53pct). The company's three fees rate was well controlled and the business level continued to improve. The company's R & D expenditure in the first quarter of 2022 was 26 million yuan, with a year-on-year increase of 67.34%. The company's R & D investment increased year-on-year, which is conducive to improving the company's long-term core competitiveness.
Product delivery is smooth and there are abundant orders on hand. In the first quarter of 2022, the company's operating cash flow was -487500 yuan, a year-on-year decrease of 189500 yuan, mainly due to the increase of accounts receivable. At the end of the first quarter of 2022, the company's contract liabilities were 32 million yuan, an increase of 50.36% month on month, indicating that the company has abundant orders on hand; Accounts receivable were 941 million yuan, up 52.90% month on month. The rapid growth of accounts receivable was mainly due to the rapid growth of Aerospace Military Products business; The inventory was RMB 515 million, with a month on month growth of 3.26%, less than the month on month growth of revenue. The delivery of the company's products was smooth.
Aim at high-end Aerospace Forgings and continue to increase production capacity. During the reporting period, the company established its subsidiary Wuxi paixin as the main body of the company's fixed increase project. The main content of the fixed increase project is the construction of the production line of special alloy structural parts for aerospace, and 237 sets of main equipment such as fast forging press and die forging hydraulic press were purchased. The total investment of the project is 1.5 billion yuan. After the project is completed and fully completed, it is expected that the annual new operating revenue will be 1.762 billion yuan (accounting for 101.68% of the revenue in 2021), and the annual net profit will be 434 million yuan (accounting for 142.78% of the net profit in 2021). The project is expected to start construction in 2023, with a construction period of 3 years. After the completion of the project, it is expected to significantly increase the company's performance.
Investment suggestion: we maintain the company's profit forecast. It is estimated that the company's revenue from 2022 to 2024 will be RMB 2.353/3.814 billion respectively, the net profit attributable to the parent company will be RMB 4.18/5.87/793 million respectively, the corresponding EPS will be RMB 3.87/5.44/7.34 respectively, and the corresponding PE will be 26.2/18.7/13.8 times respectively. The company has strong downstream demand for high-end forgings and outstanding scale effect, maintaining the "buy" rating.
Risk warning: military orders are less than expected; Civil products forgings are not as expected; Performance forecast and valuation judgment do not meet expectations.
