\u3000\u3 Guocheng Mining Co.Ltd(000688) 682 Shanghai Hollywave Electronic System Co.Ltd(688682) )
Event:
The company issued the 2021 annual report and the 2022 first quarter report after the closing on April 29, 2022.
Comments:
Benefiting from the improvement of the prosperity of national defense and military industry, the company’s revenue and profit have achieved rapid growth
In 2021, under the background of the continuous improvement of the scene bearing of the national defense and military industry city, the company continued to explore the market, steadily implemented and delivered with the technical advantages in the field of electromagnetic simulation and measurement, and further expanded the product line of measurement business through the acquisition of Hongjie electronics, realizing the rapid growth of operating revenue. The company achieved an operating revenue of 330 million yuan, a year-on-year increase of 43.78%; The net profit attributable to the parent company was 60.918 million yuan, a year-on-year increase of 35.90%; Excluding the impact of share based payment expenses, the net profit attributable to the parent company was 677982 million yuan, a year-on-year increase of 51.24%. The comprehensive gross profit margin was 42.57%, with a year-on-year increase of 3.47 percentage points; The net interest rate was 20.22%, an increase of 0.66 percentage points year-on-year. In terms of expenses, the company further increased R & D investment and strengthened market development. The rates of sales, management and R & D expenses were 3.56%, 8.48% and 9.39% respectively.
Strengthen the independent research and development and application of industrial software, and the business of electromagnetic measurement system is growing rapidly
1) electromagnetic measurement system business: the revenue was 262 million yuan, with a year-on-year increase of 80.49%. In 2021, the company further strengthened market development and steadily carried out delivery. The types of products delivered include phased array calibration measurement system, radar cross-sectional area measurement system, 5g base station antenna OTA measurement system, etc. 2) Electromagnetic field simulation analysis and verification business: the revenue was 32 million yuan, with a year-on-year increase of 10.83%. In 2021, the company released the general CAE electromagnetic simulation software – 3D electromagnetic simulation software rdsim1 Version 0 to promote the independent research and development of CAE software and the process of domestic substitution and upgrading. 3) Phased array product business: the company actively develops new millimeter wave phased array antennas to meet the development and production needs of low-cost and miniaturized new phased array antennas. 4) General testing business: the revenue was 31 million yuan, with a year-on-year increase of 34.38%.
The operating revenue of 22q1 company increased steadily, and a major sales contract of 334 million yuan was signed in April
In the first quarter of 2022, the company achieved an operating revenue of 543378 million yuan, a year-on-year increase of 21.10%; The net profit attributable to the parent company was 2.8096 million yuan, a year-on-year decrease of 35.31%; Excluding the impact of share based payment expenses, the company realized a net profit attributable to the parent of 6.5458 million yuan, a year-on-year increase of 50.73%. In terms of expenses, the rates of sales, management and R & D expenses of the company are 5.02%, 12.33% and 16.50% respectively. On April 23, the company issued the announcement of particularly significant contracts. Recently, the company signed a product sales contract with a customer, with a tentative contract amount of RMB 334 million (including tax). The performance of relevant contracts will have a positive impact on the company’s operating revenue and net profit.
Profit forecast and investment suggestions
The continuous promotion of national defense informatization construction has brought new development opportunities to relevant electronic information companies, and the company is expected to fully benefit. It is predicted that the operating revenue of the company from 2022 to 2024 will be 466, 618 and 808 million yuan, the net profit attributable to the parent company will be 85, 115 and 153 million yuan, the EPS will be 231, 3.12 and 4.15 yuan / share, and the corresponding PE will be 39.05, 28.84 and 21.71 times. Since its listing, the company’s PE has mainly operated between 50-150 times. Considering the recent changes in market valuation level, the company’s target PE in 2022 has been reduced to 60 times, and the corresponding target price is 138.60 yuan. Maintain the “buy” rating.
Risk tips
Covid-19 recurrent pneumonia; Technology upgrade iteration risk; Brain drain risk; Risk of industrial policy change; Overseas procurement may be affected by export control and trade friction; Market competition intensifies.
