Performance summary: in 2021, H1 achieved operating income of 237 million yuan, an increase of 27.01% over the same period last year; net profit of 40.5819 million yuan, an increase of 19.91% over the same period last year; and net profit of 38.0144 million yuan, an increase of 20.68% compared with the same period last year.
The market for industrial automation is vast, and the share of domestic brands is expanding at an accelerated pace. With the introduction of relevant national policies, the development of China's industrial automation equipment industry has made remarkable progress, and the domestic substitution process has been accelerated. The size of China's automation market is expected to reach 208.5 billion yuan in 2022, with nearly 15% growth compared with 2020. In terms of low-voltage frequency converter, the main companies are overseas European and American representative manufacturers including Siemens, ABB, Schneider, and Japanese representative manufacturers Yaskawa, Mitsubishi, Fuji and so on. In recent years, with years of R & D investment, the advantages of domestic frequency converter products such as reliability, pre-sales and after-sales service, cost control and so on have gradually emerged. Domestic frequency converter enterprises represented by Huichuan Technology, Inviton and Sine Electric are gradually seizing the market of foreign brands, and their market share continues to increase.
Direct sales and distribution at the same time, actively expand the channels of major customers and dealers. 1) under the direct sales mode, the company maintains long-term and stable cooperation with the domestic construction lift leader Guangzhou Tewei, Sany heavy Industry and other well-known enterprises in downstream fields. and successfully developed new customers, the Chinese Academy of Sciences Institute of Microelectronics subsidiaries Zhongke Weizhi, the new third board listing company Changzhou Buyun and realized large-scale cooperation. 2) under the distribution mode, the company makes use of its good reputation of products and services to actively layout the market and vigorously cultivate and develop dealer customers. During the reporting period, the number of the company's dealers increased from nearly 100 to more than 140, with a rapid increase in scale. The stability and expansion of the dealer team, smooth sales channels and high-quality dealer resources have promoted the overall business growth of the company and deepened the market segmentation of the industry, and the integrated special plane has been launched continuously. The company started as a general frequency converter, while enriching the category, combined with the differentiated process requirements of different industries, continue to launch the corresponding integrated special plane. Including: construction elevator all-in-one machine and frequency converter, wire drawing machine all-in-one machine and frequency converter, ball mill all-in-one machine and frequency converter, air compressor all-in-one machine and frequency converter, etc., in-depth service subdivision of industry customers, opened up the lifting machinery, wire and cable, petrochemical, printing and packaging, air compressor and other industries application technology platform.
Profit forecast and investment advice. We select five comparable companies in the industrial control automation industry, and the average PE from 2021 to 2023 is 34,26,15 times respectively. The iterative speed of the company's servo system and integrated special plane products is accelerated, and the performance is growing rapidly; general frequency converter products have solid technical advantages, and the business scale is expected to continue to expand.
It is expected that the compound growth rate of homing net profit in the next three years is expected to reach 38.38%, giving the company 34 times PE in 2021, with a target price of 37.40 yuan, with a "buy" rating for the first time.
Risk hints: the risk of low market share and intensified market competition; the risk of falling product prices; the risk of stability of customer cooperation; and the risk of low income from high-performance products.
