\u3000\u3 Shengda Resources Co.Ltd(000603) 915 Jiangsu Guomao Reducer Co.Ltd(603915) )
Event 1:
The company issued its annual report 2021. In 2021, the company achieved a revenue of 2.944 billion, yoy + 34.81%, mainly due to the strong economic recovery in 2021 and the steady growth of all business segments of the company; The company realized a net profit attributable to the parent company of 462 million, yoy + 28.66%; Deduct the net profit not attributable to the parent company of RMB 424 million, yoy + 32.10%; The comprehensive gross profit margin is 27.12%, yoy-1.16pct; The net operating cash flow was 399 million yuan, yoy-3.38%.
Products in 21 years:
1) gear reducer: revenue of 2.131 billion, yoy + 30.2%; Gross profit margin 28.14%, yoy-1.29pct.
2) cycloidal pinwheel reducer: revenue 517 million, yoy + 20.3%; The gross profit margin is 19.93%, yoy-0.9pct.
3) gnord reducer: revenue of 165 million, yoy + 599.95%; The gross profit margin was 21.96%, with a year-on-year increase of -4.34pct;
21q4 performance:
The performance of 21q4 is slightly lower than the market expectation: 21q4 company achieved a revenue of 686 million, yoy + 11.48%, a net profit attributable to the parent of 117 million, yoy-4.24%, deducting a net profit attributable to the parent of 102 million yuan, yoy-8%; The comprehensive gross profit margin is 27.04%, yoy + 0.28pct; The comprehensive net interest rate is 16.74%, yoy-3.19pct.
Event 2:
The company released the first quarterly report of 2022. The performance of 22q1 was slightly lower than the market expectation. 22q1 company achieved revenue of 610 million, yoy-5.05%; Net profit attributable to parent company: 65 million, yoy-18.55%; Deduct 59 million yuan of net profit not attributable to parent company, yoy-23.45%; The comprehensive gross profit margin is 25.21%, yoy-1.18pct; The comprehensive net interest rate is 10.56%, yoy-1.84pct; The period expense rate is 12.39%, yoy + 2.28pct.
Industry logic: automation cycle + acceleration of domestic substitution
In the fourth round of automation cycle, the top was built at a growth rate of 22%, a new high in 10 years. After reviewing the development of the automation industry since 2007, we found that the three sub sectors of reducer + Machine Tool + Siasun Robot&Automation Co.Ltd(300024) resonated, and the automation cycle peaked around 2010, 2014, 2017 and 2021 respectively, and the single cycle lasted for 3-4 years. We believe that the cycle is the manifestation of endogenous demand and external stimulus. The second and third rounds are mainly small cycles dominated by endogenous demand, which is different from the external stimulus of the first round of four trillion policy. This cycle is the external stimulus that the production capacity of the epidemic dividend trend is inclined to China. We expect this cycle to continue to 2023.
Domestic substitution logic is clear, and gradually cut into the high-end market + layout of core raw materials
1) the company acquired Changzhou lexno in 2020 to create a new high-end brand “gnord”. According to the announcement of the company, the main construction of the new plant is planned to be completed in 2023q1. After the completion of the project, it is expected to form a production capacity of about 90000 high-end reducers per year.
2) integrate upward, improve self-made rate and cross the raw material cycle. A. Acquire the casting manufacturer (Pan Kester) and extend the upstream industrial chain. Pan Kester’s main products are gray iron parts and ductile iron parts. The company opens up the production link of raw materials of upstream castings through equity participation and extension, and forms a synergistic effect with reducer products. B. With the layout of “1.6 million gear project” forgings, we judge that the self-made rate of gears is expected to increase steadily, so as to reduce the dependence on gear suppliers.
Profit forecast: we expect the company’s net profit attributable to the parent company in 22-24 years to be 5.4/6.5/810 million respectively (previously predicted net profit in 22-23 years to be 618870 million respectively). Mainly considering the downward cycle of the industry, we adjust the reducer sales volume, and the corresponding PE is 17 / 14 / 11x respectively, maintaining the overweight rating!
Risk warning: macroeconomic downturn risk; Market competition risk; Recovery risk of accounts receivable.
