\u3000\u3000 Zhenjiang Dongfang Electric Heating Technology Co.Ltd(300217) (300217)
Event: in 2021, the company expects to realize a net profit attributable to the parent company of RMB 115 ~ 173 million, a year-on-year increase of + 90.31% ~ 185.46%, and a net profit attributable to the parent company of RMB 100 ~ 130 million after deduction, a year-on-year increase of + 35.99 ~ 76.79%. Q4 company expects to realize the net profit attributable to the parent company of 34 ~ 91 million yuan, a year-on-year increase of + 1346 ~ 3825%, and the net profit attributable to the parent company of 17 ~ 47 million yuan, a year-on-year increase of – 44% ~ + 58%.
Comments:
Driven by national policy and market, the orders of photovoltaic manufacturing equipment increased rapidly. The national double carbon policy supports the rapid development of photovoltaic industry. The polysilicon reduction furnace and cold hydrogenation electric heater produced by the company are important equipment for polysilicon production. In November 2021, the company signed an order of 125 million yuan for reduction furnace and spare parts with Zhejiang Tejun. We believe that the investment of photovoltaic manufacturing equipment will still be at the peak of investment in 2022, and the company’s orders are expected to continue to be large.
Leading electric heater manufacturers accelerate the expansion of new energy vehicle parts related business. As a leading manufacturer of domestic PTC electric heaters in China, the company has actively entered the PTC electric heater track of new energy vehicles. At present, the intended orders obtained by the company in 22 years have exceeded the original planned production capacity of 250000 sets. In 22 years, it is expected that 1 million sets of water heating and 750000 sets of air heating PTC electric heater production lines of new energy vehicles will be completed and put into operation, releasing the production capacity or providing more growth space for the company’s PTC business. In the domestic PTC electric heater sector, the company maintains the leading advantage in the industry and switches the adhesive PTC electric heater to the shovel type with energy conservation, environmental protection and lower cost, which is expected to further improve the market share and profitability of the company.
The business of optical communication materials has entered the recovery period, and there is a huge space for domestic replacement of pre nickel plating. In the past 21 years, the purchase quantity of mobile optical fiber and cable increased by 20% year-on-year. The price of steel and aluminum materials for communication optical cable was repaired, and the volume and price rose together. As a leading enterprise in the industry, the market share of Jiangsu Jiutian, a subsidiary, increased significantly, and the profitability is expected to be gradually improved. The company is a manufacturer with scarce technology of pre nickel sectord battery steel materials in China. The technology is in the stage of active promotion and optimization. The construction plan of the second high-speed and high-precision pre nickel plating production line has been launched. There is huge room for domestic substitution, which is expected to become the growth point of the company’s future performance.
Profit forecast and investment rating: we estimate that the company’s operating revenue in 21-23 years will be RMB 2.826/38.10/4.685 billion respectively, with a year-on-year increase of + 17.90 / + 34.83 / + 22.94% respectively; The net profit attributable to the parent company was 129 / 235 / 329 million yuan, a year-on-year increase of + 113.9 / 81.9 / 40.0%, corresponding to 57.09/31.38/22.41 times of PE. Maintain the “buy” rating.
Risk factors: the introduction of shovel type PTC electric heater is not as expected, the business expansion of PTC electric heater of new energy vehicles is not as expected, the policy changes such as subsidies for new energy vehicles affect the industry growth, the policy changes of photovoltaic industry, and the centralized purchase price of 5g communication optical fiber and cable continues to decline.
