Event: the company released a semi-annual report, with revenue of 1.988 billion yuan in the first half of 2021, an increase of 13.57% over the same period last year, and a net profit of 278 million yuan, an increase of 24.95% over the same period last year.
The semi-annual performance is in line with expectations, and there are many bright spots in the structure. The company's 2021H1 revenue is 1.988 billion yuan (YoY + 13.57%), and the mother net profit is 278 million yuan (YoY + 24.95%). The performance is basically in line with expectations. From a quarterly point of view, 2021Q1 and Q2 realized revenue of 865 million yuan (YoY + 181%) and 1.123 billion yuan (YoY-22.03%), respectively, and returned to their mother net profit of 62 million yuan (YoY + 291.7%) and 216 million yuan (YoY-15.2%). There are two main reasons for the decline in the company's Q2 growth index: first, due to the disturbance of the epidemic, the operation of 2020Q1 was blocked, the growth rate dropped sharply, and the compensatory growth of 20Q2 led to a high base in the current quarter; second, Jerry's 2021H1 revenue was 554 million, down 23% from the same period last year, which had a greater impact on the current total revenue and profit growth. In terms of business, the proportion of the company's military and civilian products in the first half of the year was about 7:3, of which underwater electronic defense products in military products performed well, with revenue up 38%, and civil electronic and information products increased significantly by 83.8% compared with the same period last year, which was better than expected. on the other hand, the special electronic products in military products fell by 35.2%, which was a drag on the company's overall revenue. The latter is mainly the business scope of the subsidiary Jerry Electronics, and its lower-than-expected military revenue is mainly related to the confirmation rhythm of military products.
We believe that with the accelerated recognition of military revenue in the second half of the year, it is a high probability event for Jerry Electronics to fulfill its performance commitment, and the company's annual revenue and performance can be expected to grow rapidly.
The underwater acoustic defense sector is booming, with new orders growing by about 60%. Relying on 715 companies, the company has an absolutely dominant position in the domestic underwater acoustic electronics field, and is the core supplier of navy underwater acoustic equipment. 2021H1, the company's underwater acoustic electronic defense products signed a new contract of 1.2 billion yuan, reaching 80% of the whole of 2020, a year-on-year growth rate of about 60%. In order to cope with the increase in orders, the company recently raised the maximum amount of goods purchased from related parties this year to 1.1 billion yuan, an increase of 22.2%. We believe that with the increasingly fierce confrontation between marine reconnaissance and anti-reconnaissance, the demand for underwater equipment such as underwater acoustic communications, detection and confrontation is expected to increase during the 14th five-year Plan period.
The subsidiary has been approved as "specialized and innovative", and its core competitiveness is prominent. The subordinate enterprises of the company, such as Qingdao Jerry, Jerry Electronics, Jerry Automation and Shuangwei Intelligence, have been approved to become the new "Little Giants".
The core competitiveness of the enterprise is highlighted, and it is expected to grow into an invisible champion in their respective fields in the future, which will help the company's sustainable development.
The restructuring of the group is expected to sink and the company will benefit significantly. In the second half of 2021, SASAC will focus on advanced manufacturing and scientific and technological innovation, and substantially promote restructuring in marine equipment and other areas. At present, the merger at the level of the North-South Shipping Group is coming to an end, and it is expected to sink to the subsidiaries in the future. As the electronic information plate platform of China Shipbuilding Group, underwater electronic equipment assets have been basically injected into the company, and there are still a large number of ship electronic information assets to be injected in vitro. With the deepening of the group asset restructuring, the company will significantly benefit from the improvement of the group asset securitization rate.
Investment suggestion: the net profit of the company from 2021 to 2023 is expected to be 851 million yuan, 1.13 billion yuan and 1.49 billion yuan respectively, and the EPS is 1.20,1.58 and 2.09 yuan respectively. The current stock price corresponds to 26x, 20x and 15x. With reference to the comparable company valuation, the company valuation has a clear advantage, maintaining the "recommended" rating.
Risk Tip: the risk that the company's orders fall short of expectations and capacity expansion falls short of expectations.
