\u3000\u30 Zhongyan Technology Co.Ltd(003001) 85 Tongyu Heavy Industy Co.Ltd(300185) )
Events
Tongyu Heavy Industy Co.Ltd(300185) released the annual report of 2021 and the report of the first quarter of 2022: the annual operating revenue in 2021 was 5.749 billion yuan, an increase of 1.07% year-on-year; The gross profit was 1.003 billion yuan, a year-on-year decrease of 25.81%; The net profit attributable to the parent company was 285 million yuan, a year-on-year decrease of 25.36%. In the first quarter of 2022, the operating revenue was 1.347 billion yuan, a year-on-year decrease of 8.38%; The gross profit was 189 million yuan, a year-on-year decrease of 34.93%; The net profit attributable to the parent company was 52 million yuan, a year-on-year decrease of 48.20%.
Comments
Revenue and profit growth and gross profit margin in 2021 are lower than our expectations
In 2021, the annual operating revenue reached 5.749 billion yuan, a year-on-year increase of 1.07%; The gross profit was 1.003 billion yuan, a year-on-year decrease of 25.81%; The net profit attributable to the parent company was 285 million yuan, a year-on-year decrease of 25.36%. In the whole year, the comprehensive gross profit margin was 17.45%, which decreased by 6.33 percentage points compared with the whole year of 2020 and increased by 2.683.38 percentage points compared with the fourth quarter of 2021.
The growth rate of the company’s operating revenue and net profit in 2021 was lower than our expectation, mainly because the actual hoisting volume in the downstream was significantly lower than our expectation, and it was mainly dominated by offshore wind power orders. The company was subject to the product structure, and the growth rate of revenue was lower than the industry average. The overall gross profit margin was much lower than expected, mainly due to the impact of the rise in the price of raw materials and the quarterly decline in the gross profit margin of relevant orders in 21 years. Moreover, the original inventory level of the company in 21 years is low, and the price rise of raw materials is much higher than expected, which has a great impact on the gross profit margin of the company.
In the first quarter of 2022, the company’s operation continued to be lower than expected, but the gross profit margin is expected to bottom out
In the first quarter of 2022, the operating revenue was 1.347 billion yuan, a year-on-year decrease of 8.38%; The gross profit was 189 million yuan, a year-on-year decrease of 34.93%; The net profit attributable to the parent company was 52 million yuan, a year-on-year decrease of 48.20%. The comprehensive gross profit margin was 14.11%, a decrease of 5.76 percentage points compared with the first quarter of 2021, 3.34 percentage points compared with the whole year of 2021 and 0.67 percentage points compared with the fourth quarter of 2021.
The company’s revenue, profit growth and gross profit margin in the first quarter were lower than our expectations, mainly because the company was still executing and digesting 21-year low-cost orders in the first quarter of 22 years, but the month on month decline of the company’s gross profit margin in the first quarter has converged. Recently, the price level and gross profit margin of newly signed orders have bottomed out and rebounded, and the company’s inventory has been more fully prepared. The gross profit margin in the first quarter is probably the inflection point. The gross profit margin of wind turbine spindle and castings will begin to repair, and it is expected that the gross profit margin of subsequent revenue settlement will rise significantly.
Profit forecast
The company’s annual performance in 2021 was lower than our prediction, and the performance in the first quarter of 22 was much lower than our expectation, mainly because the company continued to digest relevant forging and casting orders with low gross profit margin in 21 years in the first quarter of 22. However, the national epidemic control has a great impact in the second quarter of the current 22 years. It remains to be seen whether the forging spindle and wind power casting business can develop as expected in the second quarter. According to the company’s 2021 annual report and the data of the first quarter of 22, we carefully consider adjusting the corresponding prediction model.
We expect the company to realize operating revenue of RMB 6.459 billion, RMB 7.325 billion and RMB 8.411 billion from 2022 to 2024, net profit attributable to the parent company of RMB 365 million, RMB 452 million and RMB 560 million, and total share capital of 3.897 billion shares, corresponding to eps0.01 billion 37, 0.46 and 0.57 yuan. On April 29, 2022, the share price was 2.45 yuan, corresponding to the market value of 9.5 billion yuan. From 2022 to 2024, PE was about 26, 21 and 17 times.
The determination of the national carbon neutralization strategy has changed the expectation of the total amount of the wind power industry in the next 3-5 years. We believe that the time for the prosperity of the wind power industry to return to normal after the rush loading in 2021 will be prolonged. On the whole, we believe that the company has basically digested the 21 low-cost orders, made corresponding preparations for the rise in the price of raw materials, and the gross profit margin of its core business is expected to bottom up and improve. To sum up, we maintain the company’s “overweight” rating.
Risk tip: the macro economy is lower than expected, the industry competition intensifies, and the growth of wind power business is lower than expected.
