\u3000\u3 China Vanke Co.Ltd(000002) 179 Avic Jonhon Optronic Technology Co.Ltd(002179) )
Event: the company released the first quarterly report of 2022 on April 29. In the first quarter, the company achieved a revenue of 3.97 billion yuan, a year-on-year increase of 17.1% and a month on month increase of 126.3%; The net profit attributable to the parent company was 740 million yuan, an increase of 18.1% year-on-year and 100.3% month on month. The company's performance is better than the market expectation. We believe that the main reason is the good prosperity of the industry and the strong operation and management ability of the company.
Good cost control during the period; Improve the management ability of accounts receivable. 1q22, the company: 1) the expense rate during the period decreased by 0.8ppt to 15.6% year-on-year, and decreased year-on-year for four consecutive years (the expense rate during 1q18 was 20.8%). Specifically, the sales expense rate was 2.1%, with a year-on-year decrease of 0.7ppt; The management fee rate was 6.0%, with a year-on-year increase of 0.5ppt; The R & D expense rate was 7.5%, a year-on-year decrease of 0.8ppt, and the R & D expense was 300 million yuan, yoy + 6.1%. 2) The credit impairment loss was 34 million yuan, a year-on-year decrease of 65.0%, which was caused by the decrease in the expected credit loss of receivables; 3) The asset impairment loss was 62 million yuan, with a year-on-year increase of 62.0%, which was caused by the provision of inventory impairment loss. 4) 1q22's overall gross profit margin was 39.8%, a year-on-year decrease of 1.6ppt; The net interest rate was 19.9%, with a year-on-year increase of 0.3ppt.
Prepayments increased by 79% over the beginning of the year; Orders are full and the boom continues. By the end of 1q22, the company: 1) monetary capital was 6.13 billion yuan, a decrease of 26.2% over the beginning of the year; 2) Accounts receivable and bills amounted to 10.44 billion yuan, an increase of 11.9% over the beginning of the year; 3) The prepayment was 100 million yuan, an increase of 79.4% over the beginning of the year, mainly due to the increase of prepayment for materials. 4) The inventory was 5.01 billion yuan, an increase of 6.0% over the beginning of the year and 63.5% over the same period last year; 5) Contractual liabilities amounted to 880 million yuan, a decrease of 14.3% over the beginning of the year and an increase of 219.5% over the same period last year; 6) Other payables amounted to 560 million yuan, a decrease of 30.7% over the beginning of the year, mainly due to the first unlocking of equity incentive and the reduction of other payable restricted stock repurchase obligations.
Increase investment in base construction and promote a new pattern of industrial development. 1q22, the company: 1) the net cash flow from operating activities was - 550 million yuan (the same period of last year - 310 million yuan), mainly due to the increase in cash paid for purchasing goods and receiving labor services; 2) The net cash flow from investment activities was - 1.6 billion yuan (the same period last year - 260 million yuan), mainly due to the development of structured deposit business; 3) The net cash flow from financing activities was - 30 million yuan (80 million yuan in the same period of last year). On January 13, the company completed an additional issuance and listing of 3.4 billion yuan to raise funds for the construction of South China industrial base project and basic device industrial park project. The project construction will improve the company's production capacity, improve the company's industrial regional layout, continue to consolidate the company's competitiveness in the field of defense special connectors, and lay a foundation for the future industrial layout.
Investment suggestion: as the leader of China's special connector industry, the company has been deeply engaged in the connector industry for more than 50 years. In addition to better development opportunities for defense products during the 14th Five Year Plan period, the company's market share in new energy vehicles, communications, rail transportation and other fields may continue to expand in the future, and firmly move towards the leading development path of "world-class" connectors. We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 2.605 billion, RMB 3.459 billion and RMB 4.565 billion respectively. The current share price corresponds to PE of 33x / 25X / 19x from 2022 to 2024. Considering the leading position of the company's connector and the high certainty of downstream demand, we give 40 times PE in 2022, EPS in 2022 is 2.29 yuan / share, and the corresponding target price is 91.77 yuan. Maintain a "recommended" rating.
Risk warning: downstream demand growth is less than expected; The production and delivery of products are not as expected.
