\u3000\u3 China Vanke Co.Ltd(000002) 413 Jiangsu Leike Defense Technology Co.Ltd(002413) )
Event: the company recently released the 2021 annual report and the first quarterly report of 2022. In 2021, the revenue was 1.622 billion yuan, yoy + 33.5%; The net profit attributable to the parent company was - 241 million yuan, from profit to loss. In the first quarter, the revenue was 330 million yuan, yoy + 62.3%; The net profit attributable to the parent company was 26 million yuan, yoy + 27.8%. The company's annual report performance is lower than the previous market expectation, and the quarterly report performance is in line with the market expectation. The 2021 annual report was lower than expected mainly due to the company's provision for goodwill impairment of 407 million yuan and the amortization of equity incentive expenses increased by 55.75 million yuan.
The business is arranged in an all-round way, and the space for intelligent control and intelligent network connection is broad. The company's main business includes five business groups, among which: 1) radar system, satellite application and secure storage business grow steadily, with revenue of 520 million yuan, 560 million yuan and 180 million yuan respectively in 2021, yoy + 35.8%, + 13.1% and 15.8%; 2) The R & D business of yoy exceeded the expectation by more than 5.5 billion yuan and the revenue of yoy + 2.2% in 2021; 3) The intelligent network service launched two key products: 80GHz millimeter wave traffic radar and intelligent multi-source sensing integration machine, which were widely used in the market. In 2021, the revenue was 90 million yuan, yoy + 1346.8%. We believe that the company has great development potential in the fields of intelligent control and intelligent network connection, and the above businesses are expected to help the company walk out of a new growth curve.
The balance sheet reflects the prosperity of demand; Net operating cash flow improved. By the end of 1q22, the company had: 1) accounts receivable and bills were 1.59 billion yuan, an increase of 3.2% over the beginning of the year; 2) The inventory was 1.03 billion yuan, basically the same as that at the beginning of the year; 3) Contract liabilities amounted to 140 million yuan, a decrease of 3.2% over the beginning of the year. 1q22, the company: 4) the net cash flow from operating activities was - 130 million yuan (the same period last year - 170 million yuan). The improvement of sales collection narrowed the outflow range of cash flow from operating activities; 5) Net cash flow from investment activities - 180 million yuan (same period last year - 320 million yuan); 6) The net cash flow from financing activities was 19 million yuan, yoy-94.9%. In the same period last year, the company received the funds raised by non-public offering.
The ability of cost control has been significantly improved; The profit margin decreased year-on-year. 1q22, the company: 1) during the period, the expense rate decreased by 10.0ppt to 30.7% year-on-year. Specifically, the sales expense rate was 2.4% and decreased by 0.5ppt year-on-year; The management fee rate was 18.2%, a year-on-year decrease of 3.7ppt; The financial expense ratio was 1.4%, with a year-on-year decrease of 1.8ppt; The R & D expense rate was 8.7%, a year-on-year decrease of 4.0ppt, and the R & D expense was 29 million yuan, yoy + 11.3%. 2) The reversal of credit impairment loss of 4.787 million yuan (6.895 million yuan in the same period last year) is due to the recovery of some receivables and the reversal of accrued bad debt reserves in the current period. The gross profit margin of 1q22 was 37.3%, a year-on-year decrease of 9.9ppt; The net interest rate was 8.5%, a year-on-year decrease of 0.5ppt.
Investment suggestion: the company has strong R & D strength and excellent technical talent team. Now it has formed an all-round layout of five business modules. At the same time, it has actively explored the civil market in the fields of radar system and intelligent network connection. We expect the net profit attributable to the parent company from 2022 to 2024 to be 176 million yuan, 211 million yuan and 253 million yuan respectively. The current share price corresponds to PE of 35x / 29x / 24x from 2022 to 2024. Considering the boom of downstream demand and the growth potential of the company's intelligent Internet connection, we give 40 times PE in 2022, with EPS of 0.13 yuan / share in 2022, corresponding to the target price of 5.24 yuan. For the first time, give a "cautious recommendation" rating.
Risk warning: goodwill impairment risk; The progress of product research and development is less than expected.
