\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 87 Anhui Zhongding Sealing Parts Co.Ltd(000887) )
Event: the company released the annual report of 2021 and the first quarterly report of 2022: the company’s revenue / net profit attributable to the parent / net profit deducted from non attributable to the parent in 2021 were 12.58 billion / 970 million / 670 million respectively, with a year-on-year increase of + 8.9% / + 96.0% / + 126.6% respectively, of which the non recurring profit and loss was mainly the profit and loss from asset disposal (180 million) + investment income (160 million). 1q22’s revenue was 3.36 billion, with a month on month ratio of + 5.1% / + 3.7%, and the net profit attributable to the parent company was 250 million, with a month on month ratio of + 5.6% / + 70.7%.
Revenue side: the incremental track business has a good momentum of development. 1) In terms of structure, the sealing system / cooling system / rubber business / lightweight / air suspension business of 2021 company achieved revenue of 30.6/33.0/27.6/790 million / 630 million respectively, with a year-on-year revenue of + 9.6% / + 8.7% / + 24.1% / + 78.8% / – 19.1% respectively; 2) In terms of incremental dismantling, the revenue of new energy business reached 2.06 billion in 2021 (accounting for 17.3%), the company’s Chinese platforms Wuxi & Anhui Jiake, Anhui Weigu and Anhui texton achieved a total revenue of 1.29 billion (year-on-year + 26.2%), and AMK’s orders in China reached 2.49 billion. Overall, the company’s revenue is driven by the recovery of the global epidemic, the landing of emerging businesses and the development of business in China.
Profit side: the net interest rate rose steadily driven by cost control and efficiency increase. 1) Gross profit margin. The gross profit margin of 2021 / 1q22 was 22.5% / 22.1%, with a year-on-year increase of -0.1pct / – 3.0pct respectively. In terms of splitting, in 2021, the gross profit margin of the company’s sealing system / cooling system / rubber business / lightweight / air suspension business was 27.9% / 25.6% / 20.0% / 16.1% / 16.8% respectively, with a year-on-year increase of + 1.0pct / + 7.7pct / – 4.3pct / – 1.7pct / + 4.7pct respectively; 2) Cost rate. The company’s 2021 / 1q22 three fee rates (excluding R & D) were 10.6% / 8.9% respectively, with a year-on-year rate of – 2.6% / – 1.5% respectively, mainly due to the decline in the management fee rate and sales fee rate, reflecting the improvement of the company’s global management and operation efficiency. The R & D expense ratio of 2021 / 1q22 was 4.6% / 4.6% respectively, with a year-on-year increase of + 0.3pct / – 0.7pct respectively; 3) Profit margin. The company’s 2021 / 1q22 net interest rate deducted from non parent company was 5.3% / 6.4%, with a year-on-year increase of + 2.8% / + 0.0% respectively. Overall, in the global inflation environment, the company’s gross profit margin is under pressure, and the company’s profitability has increased steadily through fee control and efficiency increase.
The internationalization “three-step” strategy has entered the fulfillment period, and the three incremental businesses are ready to go
The company started its overseas M & a strategy in 2008 and is currently in the third stage of “global M & a”, “China landing” and “overseas control”. Since 2020, the announcement shows that the company’s emerging business has received a total order of more than 13.1 billion yuan, including 5.6 billion yuan / 4.3 billion yuan / 3.3 billion yuan for thermal management pipeline / chassis lightweight / air suspension business respectively. At present, the company has the system level supply capacity of air suspension, lightweight and thermal management. The value of single vehicle supporting Byd Company Limited(002594) , Weilai, ideal and Xiaopeng is up to 6000 yuan. With the development of air spring business and the expansion of chassis lightweight category, the price of single vehicle is expected to exceed 10000 yuan.
Investment suggestion: we expect the company to achieve operating revenue of 13.91 billion yuan, 15.39 billion yuan and 16.98 billion yuan in 2022, 2023 and 2024, with a corresponding net profit attributable to the parent company of 11 400 million yuan, 1.33 billion yuan and 1.52 billion yuan, PE is 12.7 times, 10.9 times and 9.5 times based on today’s closing price, maintaining the “buy” rating.
Risk tip: the company’s product launch and sales are less than expected, the mitigation degree of chip shortage is less than expected, and the rise of raw material cost is more than expected
