\u3000\u3 Guocheng Mining Co.Ltd(000688) 007 Appotronics Corporation Limited(688007) )
Event:
Guangfeng’s income in 2021 was 2.5 billion yuan (+ 28%), and the net profit attributable to the parent was 233 million yuan (+ 105%); In 2022q1, the income was 525 million yuan (+ 0.03%), and the net profit attributable to the parent was 18 million yuan (- 67%).
Comments:
Revenue side: the performance in 2021 is in line with expectations, and 22q1 is under short-term pressure. It is expected that the growth dividend will continue to be released after the impact of the epidemic weakens. 1) The annual revenue of 2021 is + 28%, of which the revenue of end B in 2021 returns to the level of 2019; The revenue of C-end in 2021 was + 10%, of which fengmi’s own brand continued to develop, and + 50% in 2021, while Xiaomi’s OEM business contracted, which restricted the growth rate of C-end. 2) 22q1 revenue + 0.03%. The revenue of terminal B 22q1 is only + 5%, because the revenue of Q1 business education machine is affected by the high base before double reduction, with a year-on-year increase of – 49%. Repeated epidemics around the country led to a year-on-year increase of – 12% in the company’s cinema business revenue. The revenue of 22q1 at the C-end was – 5%, which was due to the closure of stores due to the epidemic, the obstruction of logistics and the tightening of Xiaomi OEM business. We hope that the above business income can resume growth after the epidemic disturbance weakens.
Profit side: the increase in the proportion of private brands drives the profit optimization of end C, and end B waits for performance repair. Fengmi has made great efforts to develop its own brand. In 2021, the business revenue was more than + 50%, accounting for nearly 50% of fengmi’s overall revenue for the first time in 2021 and 56% in 22q1. The optimization of product structure drives the gross profit margin of end C to increase by 1.41pct in 2021 and nearly 4pct in 22q1. In 202122q1b end business, the cinema business with high income and profit is affected by the epidemic. The depreciation of light source is accrued according to the straight-line method, which has nothing to do with whether it is used or not, resulting in the decline of b-end gross profit margin. After the depreciation of equipment is completed, but it can still be used, the gross profit margin will be increased.
Diversified C-end products, C-end core devices and innovative business contribute new increment to the company. 1) The independent brands of Xiaoming and fengmi, the single LCD brands restarted in mid-2021, have become the C-end Shuangquan brands, opening up the market of youth and laser micro investment. 2) The core device business has expanded rapidly in the household field, and customized and developed C-end optical machines for dangbei, Anke, etc. 3) The on-board and AR businesses continued to innovate. 22q1 obtained the vehicle regulation certificate and entered the automobile supply chain. Both car and AR have shown results this year.
Profit forecast, valuation and rating: the epidemic affected the performance, and the profit forecast of b-end and the revenue forecast of C-end laser TV were lowered. It is estimated that the revenue in 202224 will be 3.514 billion yuan, 4.816 billion yuan and 6.687 billion yuan respectively, with corresponding growth rates of 41%, 37% and 39%, net profit of 244 million yuan, 396 million yuan and 491 million yuan respectively, with corresponding growth rates of 5%, 62% and 24%, and EPS of 0.5, 0.9 and 1 yuan / share respectively. With reference to absolute and relative valuation, 40-45 times PE will be given for 22 years, and the target price is 22-24 yuan / share. Maintain the “buy” rating.
Risk tip: the C-end business is less than expected, and the epidemic continues to lead to the continuous decline of cinema business.
