Tongli shares (834599)
The company is mainly engaged in the development of off-road wide body dump trucks and other complete vehicles required for all kinds of mining and large-scale engineering material transportation. The company’s main products are off-road wide body (including mining) dump trucks, tunnel trucks, engineering sprinklers, bridge transporters and other construction machinery. More than 90% of the annual revenue comes from off-road wide body dump trucks, which are mainly used in open-pit coal mines, metal mines, gravel aggregate mines and other mining areas. Starting from the early tl85, the company gradually developed tl87, tl88 and other main models.
The high boom of downstream open-pit coal mines combined with the growth of overseas demand led to a significant increase in the company’s revenue in 2021. In 2021, the company achieved a revenue of 4.094 billion yuan, a year-on-year increase of 49.57%; The net profit attributable to the parent company was 370 million yuan, a year-on-year increase of 10.75%; Net profit deducted from non parent company was 360 million yuan, with a year-on-year increase of 11.42%. The increase was mainly due to the strong demand in the coal market in 2021, and the state approved a large number of open-pit coal mines to expand production. China achieved an income of 3.743 billion yuan (+ 40.41%, accounting for 91.42%), while the overseas market achieved an income of 351 million yuan (+ 390.64%, accounting for 8.58%); The company’s Q1-Q4 revenue in 2021 was 785 million yuan, 1096 million yuan, 908 million yuan and 1306 million yuan respectively, with a year-on-year increase of 45%, – 12%, 194% and 103%. Q3-q4 is generally not the company’s traditional peak season, which is mainly caused by the strong demand for coal in the downstream in 2021. The company’s gross profit margin in 2021 was 18.21% (- 5.37pct), which is mainly caused by the rise of steel prices.
The price of bulk commodity raw materials fell + the proportion of tl88 series new products increased, and the company’s gross profit margin is expected to be repaired. From June 2021 to now, the price of steel raw materials has been on a downward trend as a whole. The hot rolled coil commonly used in automobile steel raw materials has fallen from 6730 yuan / ton in May 2021 to 4816 yuan / ton in May 2022. The cost of raw materials of the company is expected to decline with the decline of the price of bulk commodities. The proportion of tl88 series revenue of the company increased year by year from 2018 to 2019, respectively 0.09% and 7.71%. Tl88 series products have significantly improved transport capacity and better performance than the old tl87 series products, and the bargaining power of new products is stronger, which is expected to improve the profitability of the company.
Subject to the pressure of environmental protection, clean mining and open-pit mining have become the development trend encouraged by the state, and the company is expected to continue to benefit. The 13th five year plan for coal mine safety production clearly puts forward that we should actively develop large efficient and intensive mines and large open-pit mines. The state strongly advocates open-pit coal mining. In the future, new coal mines will adopt open-pit mining when conditions permit, and the proportion of open-pit mining will increase steadily. The company’s off-road wide body dump truck is mainly used in open-pit coal mines, which will benefit with the increase of the proportion of open-pit mining.
The new plant is expected to be put into operation in the middle of the year, release production capacity, continuously expand overseas sales channels and increase R & D investment, which is expected to enhance the development potential of the company. Due to the impact of the epidemic, the progress of the raised investment project is delayed compared with the original plan. The construction project of off-road dump truck and whole road mining vehicle manufacturing base is expected to be fully put into operation around June 2022. The design capacity of the raised investment project is 6000 units, and the design capacity is expected to increase by 150%. On the sales side, the company will increase the establishment of overseas sales channels and broaden the channels of overseas dealers. In terms of new product R & D, the company increased the investment in large-scale, motorized and driverless wide body dump trucks. In 2021, the R & D cost was 56.54 million yuan, a year-on-year increase of 23.41%. The company realized the batch sales of pure electric off-road dump trucks in 2021.
Profit forecast. Based on the expectation of the high prospect of the coal industry, the gradual opening of overseas market channels and the decline in the cost of bulk raw materials, the company is expected to achieve revenue of 5.73 billion, 6.76 billion and 7.46 billion from 2022 to 2024, and realize attributable net profits of 570 million, 660 million and 750 million, with a year-on-year increase of 55%, 16% and 12%. EPS is 1.26 yuan, 1.47 yuan and 1.65 yuan respectively, and the corresponding P / E ratio PE is 7.2 times, 6.2 times and 5.5 times respectively. The company is the leader in the off-road dump truck industry. The industry is still in the growth stage. It is given a price earnings ratio of 10-12 times this year and a reasonable range of 12.6-15.1 yuan. It is covered for the first time and given a “buy” rating.
Risk tip: downstream coal demand is less than expected, overseas channel development is less than expected, and raw material prices rise sharply
