\u3000\u3 China Vanke Co.Ltd(000002) 897 Wenzhou Yihua Connector Co.Ltd(002897) )
Key investment points
Event: the company released the annual report of 2021 and the report of the first quarter of 2022. In 2021, the company achieved a revenue of 4.49 billion yuan, a year-on-year increase of + 37.4%, and a net profit attributable to the parent company of 140 million yuan, a year-on-year increase of - 24.7%. In 2021q4, the revenue in a single quarter was 1.42 billion yuan, a year-on-year increase of + 23.7%, and the net profit attributable to the parent company was 30 million yuan, a year-on-year increase of + 152.1%. In 2022q1, the revenue in a single quarter was 1.05 billion yuan, a year-on-year increase of + 23.8%, and the net profit attributable to the parent company was 40 million yuan, a year-on-year increase of + 58.8%.
In 2021, the annual revenue increased significantly, and the 22q1 profit improved significantly month on month. The substantial growth of the company's revenue in 2021 is mainly due to the substantial growth of the revenue of Cecep Solar Energy Co.Ltd(000591) bracket and automobile connector products. The Cecep Solar Energy Co.Ltd(000591) bracket products increased by 70.5% year-on-year, accounting for 9.8pp to 50.2%, and other connector and component products increased by 30.6% year-on-year, accounting for 13.4%. The increase in the price of raw materials, transportation costs and factory relocation costs put pressure on the gross profit margin of 2021, which decreased slightly to 14.8% on a year-on-year basis. Among them, the gross profit margin of Cecep Solar Energy Co.Ltd(000591) support products decreased by 5.3pp. The company responded actively by locking the exchange rate and raw material prices, and the annual inventory increased by 125.5% year-on-year. 22q1 gross profit margin + 5.7pp to 20.5% month on month, and net profit attributable to parent company + 61.1% month on month to 40 million yuan. At the same time, the company's expense side is well controlled. During 2021, the expense rate decreased by 2.6pp to 12.5%, the sales expense rate was 2.3%, the management expense rate was 8.1%, and the financial expense rate was 2.2%.
High speed connectors have the advantage of first mover, and the automobile connector business continues to expand. Looking ahead, the company is one of the few enterprises in China that can mass produce high-speed connectors. It has technical and manufacturing advantages in the subdivision field of high-speed IO connectors, has advantageous products represented by SFP and SFP + photoelectric connectors, and has established long-term and stable cooperative relations with high-quality customers such as Huawei, ZTE and Foxconn. The R & D cycle of automobile connector is long. The subsidiary Suzhou Yuanye has achieved break even and has obtained project orders from customers such as APTIV, Huawei, GKN, Byd Company Limited(002594) , Geely, etc. it is expected to benefit from the large-scale orders of downstream customers in the future to highlight the advantage of scale effect.
The self owned brand of photovoltaic support is gradually implemented to further explore the growth space. With the advantages of cost and service, the company has broken through the top 10 tracking bracket manufacturers in the world, such as nextracker, arraytechnologies, gamechangesolar and so on. In July 2021, the company announced that it planned to acquire Tianjin Shengwei, focusing on Chinese projects and adhering to independent research and development to build its own brand. We believe that the company's manufacturing advantages combined with the technical advantages of Tianjin Shengwei have great potential for customer and market expansion, which will further open up the growth space of the company.
Profit forecast and investment suggestions. It is estimated that the company's EPS from 2022 to 2024 will be 1.77 yuan, 2.39 yuan and 3.05 yuan respectively, and the corresponding PE will be 14 times, 10 times and 8 times respectively, maintaining the "buy" rating.
Risk tips: repeated covid-19 epidemic risk, large fluctuation risk of raw material price, lower than expected growth risk of downstream market, etc.
