\u3000\u3 Guocheng Mining Co.Ltd(000688) 106 Suzhou Jinhong Gas Co.Ltd(688106) )
[key points of investment]
According to the company’s disclosure, in the first quarter of 2022, the company achieved a revenue of 446 million yuan in the first quarter of 2022, a significant year-on-year increase of 26.51%, and a net profit attributable to the parent company of 38.84 million yuan, a year-on-year increase of 0.77%.
The company can provide customers with integrated solutions for gas R & D, production, sales and service. It has established a gas supply and service network with rich categories and comprehensive layout. Its services include customers in electronic semiconductors, medical health, new energy, high-end equipment manufacturing and other fields, and provides more than 100 kinds of gas products including special gas, bulk gas and natural gas.
With strong technical strength, excellent product quality and other advantages, the company has been widely recognized by many well-known customers in emerging industries. In the integrated circuit industry, Semiconductor Manufacturing International Corporation(688981) , Hynix, MGG, Jita, etc; In the LCD panel industry, there are BOE, Tianma microelectronics, TCL Huaxing, CLP panda, Infovision Optoelectronics (Kunshan) Co.Ltd(688055) etc; In the LED industry, there are Sanan Optoelectronics Co.Ltd(600703) , Focus Lightings Tech Co.Ltd(300708) , Xiamen Changelight Co.Ltd(300102) , etc. The cooperation with well-known customers not only ensures the stability of the company’s business, but also reflects the company’s excellent product quality, supply capacity and brand influence.
The combination of vertical and horizontal shows results. In 2021, the company continued to promote investment and M & A, and integrated regional markets through standardized management introduction, product structure optimization, asset upgrading and transformation, etc. In 2021, the company acquired a total of 8 companies, contributing 185 million yuan of revenue, accounting for 10.62% of the overall revenue.
Continue to strengthen R & D investment. In 2021, the company invested 69.85 million yuan in R & D, a year-on-year increase of 50.51%, accounting for 4.01% of revenue. In 2022q1, the R & D investment of the company continued to strengthen, and the R & D cost during the period was 21.04 million yuan, with a year-on-year increase of 33.16%, accounting for 4.72% of the revenue. The company is committed to solving the “neck” problem in the industry and has made good progress in electronic grade monofluoromethane, hexafluorobutadiene, electronic grade tetraethyl orthosilicate for integrated circuits and other products.
The company’s fund-raising project is progressing smoothly. In 2021, the company’s Zhangjiagang VLSI high purity gas project – hydrogen project has been accepted and officially put into production. The annual filling of 3.922 million bottles of industrial gas project is in the process of trial production, and the annual filling of 1.25 million bottles of industrial gas project has been accepted and officially put into production. The 1680t / a special electronic material project (tetraethyl orthosilicate) has been successfully put into trial production and is in the process of completion acceptance. At the same time, the company actively promotes digital and intelligent operation projects, and has achieved remarkable results in tank intelligent additional measurement system, vehicle online monitoring system, intelligent operation basic cloud platform, etc.
[investment suggestions]
Through years of horizontal and vertical layout expansion, the company has developed into a one-stop gas supply solution provider with a wide range of downstream applications. The company has strong competitive advantages in technology research and development, product types and services, customer resources and so on. It is estimated that the company’s revenue from 2022 to 2024 will be 2.412, 3.253 and 4.203 billion yuan respectively, the net profit attributable to the parent company will be 308, 426 and 572 million yuan respectively, the corresponding EPS will be 0.64, 0.88 and 1.18 yuan / share respectively, and the corresponding current PE will be 27, 20 and 15 times respectively, giving a “overweight” rating.
[risk tips]
The market demand is less than expected
The promotion of new products and new businesses is not as expected
The production expansion progress is lower than expected
