\u3000\u3 China Vanke Co.Ltd(000002) 611 Guangdong Dongfang Precision Science & Technology Co.Ltd(002611) )
Event: Guangdong Dongfang Precision Science & Technology Co.Ltd(002611) released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved an operating revenue of 3.525 billion yuan, a year-on-year increase of 20.86%; The net profit attributable to the parent company was 467 million yuan, a year-on-year increase of 20.08%; The net profit attributable to the parent company after deduction was 381 million yuan, with a year-on-year increase of 44.56%. In 2021q4, the company realized an operating revenue of 1.053 billion yuan, a year-on-year increase of 9.20%; The net profit attributable to the parent company was 146 million yuan, a year-on-year decrease of 10.40%; The net profit attributable to the parent company after deduction was 105 million yuan, with a year-on-year increase of 3.50%.
In addition, in 2022q1, the company realized an operating revenue of 636 million yuan, a year-on-year decrease of 0.07%; The net profit attributable to the parent company was 37 million yuan, a year-on-year decrease of 42.58%; The net profit attributable to the parent company after deducting non-profit was 46 million yuan, a year-on-year decrease of 12.14%.
The main industry of corrugated paper packaging has achieved steady growth, and the global layout has consolidated its market share
In 2021, the company completed 309000 sets of corrugated paper packaging equipment, with a year-on-year increase of 7.03%; The sales volume was 327800 units, a year-on-year increase of 13.35%. In terms of products, in 2021, the whole line and single machine of corrugated packaging equipment, corrugated packaging equipment accessories, corrugated packaging equipment software and services, outboard engine and general small gasoline engine equipment of the company achieved revenue of RMB 2.062/6.93/3.01/469 billion, with a year-on-year increase of 20.78% / 24.64% / – 1.91% / – 35.38%. In terms of business segments, 1) corrugated board production line segment. In 2021, fosber group, a wholly-owned subsidiary of the company, made steady growth in business contribution due to the increased demand for corrugated paper packaging products in European and American markets; In 2021, the company held 89.2% equity in fosber Asia, and strengthened business development in China and Southeast Asia. Affected by the low performance base in the same period last year, the operating performance increased significantly year-on-year. 2) For the corrugated box printing and packaging production line, the business of Guangdong Dongfang Precision Science & Technology Co.Ltd(002611) (China) corrugated box printing and packaging equipment achieved stable growth in revenue and orders in 2021. The company cooperates with key customers in downstream industries to achieve its first sales in emerging markets along the “the Belt and Road”. Sales in Asian markets outside China are growing rapidly, and market development in the United States and Africa has made progress. 3) In the water power products sector, the subsidiary Yum power benefited from the continuous growth of overseas countries’ demand for water leisure and entertainment. The orders and shipments of the company’s products increased rapidly year-on-year. In 2021, the sales of medium and high horsepower outboard machines increased by more than 50% year-on-year
Actively explore opportunities for expanding emerging industries and spin off Yum power to be listed on the gem
In 2021, the company actively arranged in the industries related to its main business, and the extension business was in the charge of the Yineng investment team. It promoted the implementation of six investment projects through direct equity participation and indirect investment, including investment in Guizhou Aerospace Xinli Technology Co., Ltd., Chengdu Dajin Aerospace Technology Co., Ltd. and Sichuan tengdun science and Innovation Co., Ltd. in the field of high-end manufacturing; In the field of consumption and innovative medicine, invest in SF City, Nanjing Qianzhi Intelligent Technology Co., Ltd. and xuanzhu Biotechnology Co., Ltd. The extension business promotes the implementation of the company’s “1 + n” development model, which is conducive to expanding the development space of emerging industries. At the same time, the company will spin off Yum power to be listed on the gem. On March 14, the company released the plan to spin off Yum power to be listed on the gem. On the one hand, the company currently controls 75% of the equity of Yum power, and the spin off will promote Guangdong Dongfang Precision Science & Technology Co.Ltd(002611) further rationalization of its main business; On the other hand, it will improve the investment and financing capacity of Yum power, optimize the corporate governance structure and improve the operating efficiency, which will help to improve the overall profitability of the company. The company’s aquatic power products (outboard machines) are mainly in the charge of its subsidiary Yum! Power. In 2021, this part of the business achieved a revenue of about 460 million yuan, a year-on-year increase of 36%, accounting for about 13% of the revenue.
Profitability is under pressure in the short term, and the cost rate control is effective during the period
In 21 years, the company’s comprehensive gross profit margin was 27.51%, with a year-on-year decrease of 0.51pct, which was mainly caused by the price fluctuation of raw materials. 22q1 company’s comprehensive gross profit margin was 25.73%, down 6.38pct year-on-year. In terms of period expenses, the period expense rate of the company in 21 years was 15.63%, with a year-on-year decrease of 2.17pct, and the sales / management / R & D / financial expense rates were 5.25% / 7.72% / 2.84% / – 0.17% respectively, with a year-on-year decrease of -0.99 / – 0.75 / + 0.02 / – 0.44pct respectively. The expense rate of 22q1 company was 15.72%, a year-on-year decrease of -6.92pct. Under the comprehensive influence, the net interest rate of the company in 21 years was 13.97%, with a year-on-year increase of 0.35pct; 22q1’s net profit margin was 6.49%, down 4.49pct year-on-year, mainly due to the impact of changes in non recurring profits and losses.
Investment suggestion: the company has been deeply engaged in the corrugated packaging equipment industry for nearly 30 years. With the steady growth of its main business, the company is actively looking for development opportunities for emerging industries. With the gradual switching of old production lines to intelligent high-end production lines and joining hands with Wande to enter the field of digital printing, its performance is expected to grow steadily in the future. We estimate that the operating revenue of Guangdong Dongfang Precision Science & Technology Co.Ltd(002611) 20222024 will be 4.003, 4.717 and 5.586 billion yuan, with a year-on-year increase of 13.57%, 17.84% and 18.42%; The net profit attributable to the parent company was 512 million yuan, 618 million yuan and 722 million yuan, with a year-on-year increase of 9.56%, 20.70% and 16.83%. The corresponding PE was 9.8x, 8.1x and 7.0x, and the investment rating of Buy-A was given.
Risk warning: raw material price fluctuation risk; Extension business integration is less than expected risk; The epidemic repeatedly affects production efficiency and risks.
