\u3000\u3 Shengda Resources Co.Ltd(000603) 197 Shanghai Baolong Automotive Corporation(603197) )
Event overview: on April 28, 2022, the company released its annual report for 2021, with a revenue of 3.898 billion yuan in 21 years, a year-on-year increase of + 17.01%; The net profit attributable to the parent company was 268 million yuan, a year-on-year increase of + 46.52%. At the same time, the company released the first quarterly report of 22 years, with 22q1 revenue of 965 million yuan, a year-on-year increase of + 3.60%; The net profit attributable to the parent company was 45 million yuan, a year-on-year increase of – 40.62%.
The short-term disturbance outside China put short-term pressure on the performance of 22q1 company. In the 21st year, the revenue was 3.898 billion, a year-on-year increase of + 17.01%; The net profit attributable to the parent company was 268 million, a year-on-year increase of + 46.52%, and the performance was lower than our previous expectation. Among them, 21q4 achieved a revenue of 1.058 billion, a year-on-year increase of + 3.7%; The net profit attributable to the parent company was 44 million, a year-on-year increase of + 3.4%, and the growth rate of Q4 revenue and profit weakened, mainly due to: 1) the company’s overseas revenue accounted for 64%, and the Q4 overseas epidemic affected global automobile sales and restrained the demand for upstream parts; 2) Q4 management expenses increased significantly, with a management expense rate of 7.23%, higher than 1.07pcts in the whole year. The company achieved a revenue of 965 million yuan in 22q1, a year-on-year increase of + 3.60%; The net profit attributable to the parent company was 45 million yuan, a year-on-year increase of – 40.62%. It was mainly due to the impact of overseas Russian Ukrainian conflict and epidemic situation, which dragged down the company’s revenue, while the profit side was under pressure due to the year-on-year increase of management and R & D expenses. The company’s 22q1 management and R & D expense rates were 8.47% / 7.32%, year-on-year + 3.01pcs / + 0.34pcs.
The adjustment of accounting standards leads to 21q4 cost fluctuation, and the operation is stable after restoration. The gross profit margin of 21q4 company was 10.91%, with a year-on-year ratio of -22.33pcs/month on month ratio of -23.67pcs; The four fee rate was 4.13%, with a year-on-year ratio of -24.07 PCTs / month on month ratio of -23.78 PCTs, of which the sales / management / R & D / finance rate was -11.89% / 7.23% / 6.97% / 1.82%, and a year-on-year ratio of -22.07 PCTs / – 1.24 PCTs / – 0.38 PCTs / – 0.38 PCTs. It is mainly because the company adjusted the “sales expenses” to “operating costs” in response to the requirements of the latest accounting standards for the relevant transportation costs incurred before the transfer of commodity control to customers and in order to perform the sales contract, resulting in a significant increase in operating costs and a significant decrease in sales expenses. The gross profit margin of 22q1 company was 28.29%, with a year-on-year increase of -6.26pcs, mainly due to the impact of sea freight and accounting standard adjustment. The sales expense of 22q1 company was 4.25%, with a year-on-year increase of -5.84pcs.
TPMS is a global leader, integrating and landing to open up profit contribution, and laying out air suspension to open up a new round of growth space. In 19 years, the company established a joint venture with Hoff and became the third largest TPMS supplier in the world. In 21 years, Baofu lost 12 million overseas (68 million in 19 years), Baofu China made 31 million profits (25 million in 19 years), and its profitability was greatly improved. The company has arranged the air suspension business and effectively increased the value of single vehicle (the value of balance weight, valve and exhaust pipe of traditional cash flow business is about 110 yuan, and the value of air suspension assembly is about 8000 yuan). At present, the company has mastered the technology of air suspension core components such as air spring and electromagnetic shock absorber, and has the capacity of large-scale mass production. With the improvement of air suspension permeability and localization, the company is expected to usher in the second growth curve.
Investment suggestion: the company’s new business continues to increase in volume. We raised the revenue from 2022 to 2023 to 4.797/5.638 billion yuan, the net profit attributable to the parent company to 306 / 416 million yuan, and the revenue / net profit attributable to the parent company introduced 2024e to 6.692559 billion yuan. The current market value corresponds to 21 / 15 / 11 times of PE from 2022 to 2024. As a leading TPMS company, 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.
