\u3000\u3 Guocheng Mining Co.Ltd(000688) 006 Zhejiang Hangke Technology Incorporated Company(688006) )
Event overview
The company issued the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved an operating revenue of 2.483 billion yuan, a year-on-year increase of 66.35%, and the net profit attributable to the parent company was 235 million yuan, a year-on-year decrease of 36.79%; Net profit deducted from non parent company was 166 million yuan, a year-on-year decrease of 47.94%. In the first quarter of 2022, the company achieved a revenue of 797 million yuan, a year-on-year increase of 155.40%; The net profit attributable to the parent company was 94 million yuan, a year-on-year increase of 80.17%; Net profit deducted from non parent company was 86 million yuan, with a year-on-year increase of 86.73%.
Analysis and judgment:
The scale effect appeared, and there was an inflection point in profitability in the first quarter of 22 years
Benefiting from the expanding demand of lithium battery industry and sufficient orders on hand, the company's revenue increased significantly in 2021 and 2022q1. In 2020, the competition in the lithium battery equipment industry was fierce. The price of new orders decreased greatly in that year. In addition, the price of raw materials increased significantly, and the production expansion of overseas customers slowed down. The orders of that year were mainly Chinese customers. Since most of the revenue recognized by the company in 2021 was orders in 2020, the comprehensive gross profit margin of the company in 2021 decreased by 22.19pct to 26.25% year-on-year, and the net profit margin decreased by 15.44pct to 9.47% year-on-year. With the gradual improvement of the company's order quality in 2021, the company's gross profit margin and net profit margin improved month on month. In 2022q1, the gross profit margin and net profit margin of the company increased by 13.47/12.17pct to 30.30% / 11.76% month on month respectively. In terms of expenses, the rates of sales, management (including R & D) and financial expenses of the company in 2021 were 1.94% / 13.40% / 1.71% respectively. The overall expense rate decreased by 3.20pct year-on-year, and the scale effect of the company gradually appeared. In 2021, the company's inventory was 1.42 billion yuan / yoy + 78.54%, and the contract liability was 870 million yuan / yoy + 56.47%. The side shows that the company has sufficient orders on hand.
The global layout has achieved remarkable results, and customer cooperation has continued to deepen
In 2021, the company successfully won the bid for SK American factory project in South Korea, realizing the breakthrough of large-scale export of equipment to the United States, providing experience accumulation and setting a benchmark for the later development of the American market, which is of milestone significance to the company's development in the American market. At the same time, it also actively develops and maintains China's top customers, and further cooperates with battery enterprises such as Eve Energy Co.Ltd(300014) , Byd Company Limited(002594) , Gotion High-Tech Co.Ltd(002074) and so on. For example, in September 2021, the company announced that it had won a total of 522 million yuan (excluding tax) orders for Byd Company Limited(002594) lithium battery equipment project, accounting for about 21.02% of the revenue in 2021, while the sales revenue from Byd Company Limited(002594) from 2018 to 2020 accounted for about 0.01% / 1.82% / 3.65% of the revenue of the year respectively; In January 2022, the company announced that it had received Eve Energy Co.Ltd(300014) fixed-point notice and won the order of 497 million yuan (including tax) for lithium battery production equipment; In April 2022, the company announced that it had received orders of US $62 million (excluding tax) and RMB 337 million (excluding tax) from SK on Hungary and Yancheng respectively, accounting for about 30% of the company's operating revenue in 2021.
The release of production capacity was accelerated and the delivery capacity was further enhanced
The production capacity of the company's IPO raised investment project "lithium ion battery intelligent production line manufacturing expansion project" has been basically released. Part of the "frontier energy battery equipment technology research and development and supporting parts processing line expansion project" invested and constructed in 2020 has been put into use. The "lithium ion battery charging and discharging equipment intelligent manufacturing construction project" invested and constructed in 2021 has been started in the third quarter of 2021. By the end of 2021, the number of employees of the company reached 3424, nearly doubling year-on-year. On the whole, the company's production capacity is accelerating and its delivery capacity continues to increase.
Investment advice
Adjust the company's profit forecast for 20222023, adjust the revenue forecast of 3.505/5.422 billion yuan in 20222023 to 4.298/6.979 billion yuan, increase the revenue forecast of 9.157 billion yuan in 2024, adjust the parent net profit forecast of 892/1.327 billion yuan in 20222023 to 6.56/1.194 billion yuan, increase the parent net profit forecast of 1.732 billion yuan in 2024, and adjust the EPS forecast of 2.21/3.30 yuan in 20222023 to 1.63/2.96 yuan, The EPS forecast of 4.30 yuan in 2024 is added, corresponding to the closing price of 43.9 yuan / share on April 29, 2022, and PE is 27 / 15 / 10 times respectively. We maintain a "buy" rating.
Risk tips
Technological progress is less than expected, capacity expansion is less than expected, and the prosperity of downstream industries is less than expected.
