\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 80 Wuxi Longsheng Technology Co.Ltd(300680) )
Key investment points
Event: the company released the 2021 annual report and the first quarter report of 2022. In 2021, the company achieved a revenue of 930 million yuan, a year-on-year increase of 60.83%, a net profit attributable to the parent company of 97.65 million yuan, a year-on-year increase of 81.94%, and a net profit not attributable to the parent company of 88.3 million yuan, a year-on-year increase of 78.05%. In the first quarter of 2022, the company achieved a revenue of 286 million yuan, a year-on-year increase of 42.55%, a net profit attributable to the parent of 29.04 million yuan, a year-on-year increase of 36.40%, and a net profit not attributable to the parent of 28.32 million yuan, a year-on-year increase of 33.66%.
Comments:
The release of motor core capacity and the large volume of EGR products have helped the company's performance grow rapidly in 21 years. In 2021, the company's main businesses maintained rapid growth. Among them, EGR products, new energy products (motor iron core) and stamping products achieved revenue of 328 million yuan, 168 million yuan and 315 million yuan respectively, with a year-on-year increase of 47.50%, 780.02% and 23.26% respectively. In terms of gross profit margin, EGR products increased by 2.85pct to 26.70%, new energy products increased by 8.80pct to 15.03%, and stamping products decreased by 3.03pct to 23.18%. The company's main business is centered on the automobile industry. In 2021, the total output of auto parts was 848 million (+ 28.24%), and the total sales volume was 820 million (+ 25.88%). The company's optimized expenses and management expenses decreased by 0.06% - 1.06%, and the efficiency rate of the company was 0.06% - 1.53%, respectively.
22q1 gross profit margin improved month on month and profitability recovered. The company continued to benefit from the improvement of the production capacity of motor iron core. The company's revenue in 22q1 was 286 million yuan (+ 42.60%), and the overall gross profit margin was 21.3% (year-on-year - 3.9%, month on month + 2.2%) due to the adverse impact of the iron core with low gross profit margin entering the mass production stage and the rise of raw materials. With the scale effect brought by the gradual increase of motor iron core production and the price locking strategy for raw materials, the gross profit margin level will recover. The company continued to reduce costs and increase efficiency. The sales expense rate, management expense rate and financial expense rate were 1.14% (- 1.63%), 3.84% (- 0.71%) and 1.24% (+ 0.25%) respectively.
The production and sales of new energy vehicles are booming, and the production capacity of iron core phase I project is about to be fully released. The company's cumulative output of large-diameter drive motor iron core has been in a leading position in the Chinese market, covering most of the best-selling models in the market. In addition to directly supplying Tesla, it is also supplied to major new energy vehicle enterprises after supporting and assembling to primary suppliers. In 2021, the company achieved 361100 sets of motor iron cores. According to the company's 2021 annual report, the fund-raising and investment project of 1.2 million sets of motor iron cores and 90000 sets of natural gas nozzle gas rail assembly has been basically completed. At the same time, in November 2021, the company raised funds to build 10 production lines with a total capacity of 2.4 million sets / year through non-public offering. The rapid expansion of motor iron core capacity will greatly improve the company's performance for a long time, Continue to consolidate the company's leading position in the industry.
The dividend of "national six year plan" gradually appeared, and EGR business continued to develop. In 2021, the output and sales volume of EGR components of the company were 2.3518 million pieces (+ 44.29%) and 1.9479 million pieces (+ 32.26%) respectively, realizing a substantial increase. Since July 1, 2021, the "national six" standard has been implemented in the field of heavy-duty diesel vehicles. The fuel consumption limit standard and emission standard of heavy-duty diesel vehicles will be strictly implemented. It is expected that the company's EGR business will benefit throughout the year from 2022. According to the production and sales data released by China Automobile Industry Association, the cumulative production and sales of commercial vehicles in 2021 were 4.674 million (- 10.7%) and 4.793 million (- 6.6%) respectively. Although the overall production and sales declined, the overall commercial vehicle market demand was stable due to the stability of China's infrastructure investment and road freight volume. The company was originally a leader in light truck EGR. At present, it has completed cooperation with mainstream companies in the field of heavy diesel vehicles. In addition, the company of gasoline engine EGR products carried by household hybrid vehicles has also completed docking. The company has won the project designation of China's leading hybrid vehicle enterprise, and is expected to achieve mass production this year. At the same time, the fourth stage emission standard for non road machinery will also be implemented from December 1, 2022. At that time, non road machinery including construction machinery, agricultural machinery and marine machinery need to be equipped with EGR system to meet the emission requirements. Relying on its advantages accumulated in the field of automobile exhaust emission for many years, the company will continue to benefit from the drive of corresponding product demand brought by the tightening of exhaust emission standards, and the EGR business will continue to contribute to the growth of the company's performance.
Maintain the "overweight" rating: as an excellent enterprise in the auto parts industry, while developing its inherent traditional business, the company has successfully switched to the field of new energy auto parts, involving difficult product technology and high customer industry status. At present, it has shown great performance improvement brought by the new business. In the future, with the production capacity of raised investment projects put into operation and the further increase of production capacity, the company's business is expected to blossom at many points, Maintain rapid growth in performance. Taking into account the impact of the epidemic and the rise in commodity prices, we adjusted the company's revenue and performance. It is estimated that the operating revenue of the company from 2022 to 2024 will be 17.75%, 25.96% and 32.10% respectively (the originally predicted revenue in 2022 and 2023 will be 1.883 billion yuan and 2.719 billion yuan respectively), with a year-on-year increase of 90.92%, 46.25% and 23.67% respectively. The net profit attributable to the parent company from 2022 to 2024 was 1.91, 3.21 and 4.29 respectively (the net profit in 2022 and 2023 was originally predicted to be 214 and 370 million yuan respectively), with a year-on-year increase of 95.84%, 67.97% and 33.43% respectively. It is estimated that the EPS from 2022 to 2024 will be 0.95, 1.59 and 2.12 yuan respectively, and the corresponding PE will be 19.42, 11.56 and 8.67 times respectively.
Risk warning event: the policy promotion is not as expected; The newly expanded capacity was put into operation less than expected; Intensified market competition; The market demand of downstream industries grows slowly.
