\u3000\u3 Guocheng Mining Co.Ltd(000688) 499 Guangdong Lyric Robot Automation Co.Ltd(688499) )
Event overview
The company released the first quarter report of 2022. 2022q1 company achieved revenue of 805 million yuan / yoy + 53.66%; Net profit attributable to parent company: 79 million yuan / yoy + 76.78%; Net profit attributable to parent company after deduction of non profit is 72 million yuan / yoy + 61.49%.
Analysis and judgment:
The performance of 22q1 was outstanding, and the cost rate decreased month on month. 1) Benefiting from the high prosperity of the lithium battery industry, the company’s lithium battery equipment business orders increased significantly in 21 years, resulting in the company’s 22q1 revenue increased by 53.66% year-on-year to 805 million yuan; The net profit attributable to the parent company increased by 76.78% year-on-year to 79 million yuan, of which other income (mainly due to the refund upon collection of software value-added tax in 22q1) increased by 438.92% to 46 million yuan. 2) In terms of profitability, the gross profit margin of 22q1 company reached 35.81%, with a year-on-year ratio of -0.21pct/month-on-month ratio of -5.52pct, which was mainly affected by the change of product structure (that is, the first set of equipment or confirmation is more, and the gross profit margin of the first set of equipment is relatively low), while the net profit margin increased from + 1.30pct/month-on-month ratio of + 1.65pct to 9.88%. 3) In terms of expense rate, the sales / Management (including R & D) / financial expense rate of 22q1 company was 5.31% / 22.75% / 0.89% respectively, with a year-on-year change of + 1.14 / + 0.01 / – 0.73pct respectively.
Orders are expected to grow rapidly and the layout of relevant production capacity is perfect. The company has established long-term and stable cooperative relations with well-known battery manufacturers such as honeycomb energy, ATL, catl, BYD, Gotion High-Tech Co.Ltd(002074) , Sunwoda Electronic Co.Ltd(300207) and signed cooperation agreements with Byd Company Limited(002594) , honeycomb energy in June and August 2021 respectively, which has continuously improved its position in the supply chain system of various enterprises. In 2021, the company obtained contract orders and notification of award of about 7.042 billion yuan (including tax), of which the orders of power lithium battery equipment accounted for a higher proportion than we expected. With the continuous improvement of the penetration rate of new energy vehicles, the new capacity of battery manufacturers is expected to remain high in the next few years, raising the demand for lithium batteries, and the company’s new orders are expected to maintain rapid growth. In 2021, the company achieved capacity expansion by increasing plant area and expanding production personnel. On the one hand, the company expands its production capacity by adding new leased sites and new assembly workshops, and the company’s IPO raised investment project is expected to gradually contribute to the production capacity in 2023. On the other hand, the company actively introduces all kinds of talents. By the end of 2021, the company has 6496 employees (excluding interns), an increase of more than 1900 compared with the end of 2020.
It is proposed to issue convertible bonds to promote product extension, and the provincial key laboratory has been approved to assist in technology transformation. 1) The company plans to issue convertible bonds to unspecified objects, and the total amount of funds raised shall not exceed 950 million yuan. After deducting the issuance expenses, the funds raised are intended to be used for the industrialization project of special aircraft in the front and middle of lithium battery and complete sets of equipment of the whole line and supplement working capital. The fund-raising will help strengthen the competitiveness of products, further improve the supply capacity of front and middle section equipment such as coater, lamination / winding machine and the delivery capacity of whole line equipment, and undertake the demand of new orders. According to the announcement of the company, it is expected that after the completion of the project for the first time, it will realize an operating revenue of 2.758 billion yuan and a net profit of 350 million yuan. It is expected that the after tax internal rate of return will be 15.71% and the after tax static investment payback period will be 8.97 years. 2) Recently, the Department of science and technology of Guangdong Province released the list of construction projects of platform base and scientific and technological infrastructure from 2021 to 2022. The “Guangdong Key Laboratory of intelligent lithium battery manufacturing equipment enterprises” undertaken by the company entered the approved list and will carry out research from high-quality coating, high-speed lamination, high-speed and high-precision laser welding, high-efficiency formation detection, warehousing and logistics scheduling, and five core common technologies of lithium battery equipment, Promote the transformation of scientific research and technological achievements into business effects, and accelerate industrial transformation and upgrading.
Investment suggestion: keep the company’s 202224 profit forecast unchanged. It is estimated that the company’s revenue in 202224 will be RMB 4.706/66.29/8.934 billion respectively, the net profit attributable to the parent company will be RMB 482/8.04/1.139 billion respectively, and the corresponding EPS will be RMB 5.47/9.14/12.95 respectively. Based on the closing price of 141.16 yuan / share on April 27, 2022, the corresponding PE from 2022 to 24 is 26 / 15 / 11 times respectively. We have no rating yet.
Risk tip: the price of raw materials fluctuates sharply, the project to be issued convertible bonds has not been completed, there is uncertainty, industry competition intensifies, etc.
