\u3000\u3000 Suzhou Hengmingda Electronic Technology Co.Ltd(002947) (002947)
[matters]
On January 20, 2022, the company released the performance forecast for 2021. It is estimated that the net profit attributable to the parent company in 2021 will be 27 million yuan – 34 million yuan, a year-on-year decrease of 67.6% – 74.3%. Excluding the impact of share based payment expenses formed by equity incentive plan, the net profit attributable to the parent company in 2021 is equal to the base. Corresponding to the fourth quarter of 2021, the net profit attributable to the parent company in a single quarter was 46.71 million yuan – 53.71 million yuan, a significant year-on-year increase of 97.8% – 127.5%.
[comment]
The increase in the proportion of new products has significantly improved the optimization of product structure, which is expected to promote the continuous growth of the company’s revenue growth and profitability. In the second half of 2021, with the company’s positive expansion of the consumer electronics industry in the early stage, the results of the early R & D investment were shown. The company greatly optimized its product structure and process level. With the further improvement of the production scale and operation efficiency of new products, the company repaired the impact of technical difficulties and limited production capacity in the early stage, and realized the double growth of operating revenue and profit.
The new product development cycle of key customers is long. From 2020 to 2021, the company will focus on cooperating with key customers to carry out new product development and trial production, and the revenue growth and profitability will be under short pressure. With the release of mass production of downstream new products, after the company achieved the revenue inflection point in the third quarter of 2021, we can see that the profit inflection point of the company in the fourth quarter of 2021 has appeared.
With the continuous improvement of the proportion of new products and the continuous optimization of process capacity and operation efficiency, the company’s revenue growth and profitability are expected to continue. In addition, the innovation of downstream end products continues. In recent years, the company has continuously expanded new fields and businesses such as communication, VR / Ar / MR and new energy vehicles, which is expected to become the engine of long-term growth of the company’s performance.
[investment advice]
We had previously estimated that the company’s single quarter revenue in the fourth quarter of 2021 was 299 million yuan and the net profit attributable to the parent company in a single quarter was 39.98 million yuan. According to the company’s performance forecast in 2021, the company successfully achieved phased strategic objectives by obtaining high recognition from customers and new product orders. The optimization of the company’s product structure, production scale and operation efficiency exceeded our previous expectations. With the continuous improvement of the proportion of new products and the continuous optimization of process capacity and operation efficiency, the company’s revenue growth and profitability are expected to continue. Therefore, we raised the company’s revenue forecast for 2021-2023 to RMB 968, 1.323 and 1.739 billion respectively, the net profit attributable to the parent company to RMB 30, 205 and 278 million respectively, the EPS to be 0.17, 1.17 and 1.58 respectively, and the corresponding PE to be 193, 29 and 21 times respectively. Maintain the “overweight” rating.
[risk tips]
New product introduction and new business expansion were not as expected
Weak demand in consumer electronics market
The tension in the upstream semiconductor supply chain has intensified
The production expansion progress is lower than expected
The sharp fluctuation of exchange rate has a certain impact on the company’s production and operation
