\u3000\u3 Guocheng Mining Co.Ltd(000688) 533 Suzhou Sonavox Electronics Co.Ltd(688533) )
Event overview: on April 27 / 30, 2022, the company released the annual report of 2021 and the first quarterly report of 22 respectively. The revenue of 21 years was 1.302 billion yuan, a year-on-year increase of + 19.66%, and the net profit attributable to the parent company was 61 million yuan, a year-on-year increase of – 19.67%; The revenue of 22q1 was 368 million yuan, a year-on-year increase of + 17.47%, and the net profit attributable to the parent company was 13 million yuan, a year-on-year increase of – 42.26%.
The steady growth of traditional businesses and the acceleration of large-scale new businesses have contributed to the high growth of the company’s revenue. The company achieved a revenue of 1.302 billion yuan in 21 years, a year-on-year increase of + 19.66%, and a revenue of 368 million yuan in 22q1, a year-on-year increase of + 17.47%, which is in line with our previous expectations. In terms of business, 1) traditional car speaker business: in 21 years, car speakers achieved a revenue of 1.14 billion yuan, a year-on-year increase of + 12.9%, a sales volume of 60 million pieces, a year-on-year increase of + 3.9%, and the unit price increased to 19 yuan / piece, a year-on-year increase of + 9%. The simultaneous rise of volume and price helped the company further improve the global market share of car speakers (the global market share in 20192021 was 12.1% / 12.6% / 12.9% respectively); 2. New business: in the past 21 years, the company’s on-board power amplifier / vavs achieved a revenue of 82 / 26 million yuan, with a year-on-year growth rate of 109.63% / 113.79%, of which the unit price of on-board power amplifier was increased to 724 yuan / piece, with a year-on-year increase of + 5%. New businesses accounted for 8.3% of the revenue, up + 70.74% year-on-year. The volume of new businesses accelerated the optimization of the company’s product structure and helped the company’s revenue grow continuously.
The profit side is under short-term pressure, and high R & D expenses help the company’s product upgrading. The company realized a net profit attributable to the parent company of 61 million yuan in 21 years, a year-on-year increase of – 19.67%; 22q1 net profit attributable to the parent company was 13 million yuan, a year-on-year increase of – 42.26%. The pressure on the profit side is mainly due to: 1) external disturbance reduces the company’s gross profit margin: the rise in the price of raw materials such as upstream rare earth, bulk metal commodities and plastic particles and the rise in export freight lead to a year-on-year decline of 1.96 PCTs in the company’s gross profit margin in 2021; 2) Strengthen R & D and increase the company’s expense rate: with the increase of project fixed points and the increase of product and technology development, the company’s R & D team continues to expand, and the proportion of R & D personnel in the total number of the company reaches 11.9%, with a year-on-year increase of + 1.64 PCTs. At the same time, the average salary of R & D personnel reaches 195600 yuan, with a year-on-year increase of nearly 30000 yuan. The company invested 88 million yuan in R & D expenses in 21 years, with a R & D expense rate of 6.8%, year-on-year + 1.15 PCTs, and the overall four expense rate was 21.1%, year-on-year + 0.6 PCTs. R & D expenses continued to grow, accelerate product upgrading and enhance the company’s core competitiveness.
Acoustic products are distributed in the whole industrial chain, and the volume and price of new products rise together, opening up the growth space of the company. Benefiting from the improvement of users’ requirements for sound quality and the requirements of relevant laws and regulations on new energy, the penetration rate of on-board power amplifier and AVAs products has increased rapidly. The value of a single car exceeds 1000 yuan, which has several times more room for improvement than on-board speakers. Based on the existing customer structure, the company continues to promote the rapid penetration of new products. At present, it has entered the supporting system of new energy vehicle enterprises such as Weilai, Zero run, ideal and Huawei Jinkang, and new products continue to be produced in large quantities. With the increase of incremental business volume and price in the future, it is expected to significantly open the growth space of the company.
Investment suggestion: the company’s new business continues to increase in volume. We raise the revenue / net profit attributable to the parent in 20222023 and introduce the revenue / net profit attributable to the parent in 2024. It is estimated that the company’s revenue in 20222024 will be 1.975/28.85/3.537 billion yuan respectively, and the net profit attributable to the parent will be 148 / 2.42/340 million yuan respectively. The current market value corresponds to 46 / 28 / 20 times of PE in 20222024. The new business helps the company realize the simultaneous rise of volume and price. As a leading company of automotive acoustic products, it is expected to enjoy the valuation premium and maintain the “recommended” rating.
Risk tips: raw material price fluctuations lead to low gross profit margin expectations, new product expansion is less than expected, exchange rate risk, etc.
