Event description
On October 21, 2021, the company announced its third-quarter results for 2021. In the first three quarters of 2021, the company achieved operating income of 1.296 billion yuan, an increase of 24.89% over the same period last year, and a net profit of 53 million yuan, down 60.33% over the same period last year. Of this total, operating income in the third quarter was 454 million yuan, an increase of 7.48% over the same period last year, and net profit was 601500 yuan, down 98.77% from the same period last year.
Event comment
Capacity relocation, power restriction policy and epidemic situation affect the realization of income. In the first three quarters of 2021, the company's revenue growth rate fell short of expectations: first, the overall relocation of the production line from Guangming to Qingxi, Dongguan, which had a negative impact on production capacity; second, the power restriction policy that began in late September, some raw material suppliers affected the delivery of some materials due to power cuts, and production efficiency declined, indirectly affecting sales and shipments; third, some large projects delayed delivery due to the epidemic, affecting the realization of revenue. In the long-term dimension, we believe that the negative impact of the above factors on the company's performance is expected to gradually weaken.
The rise in the price of raw materials and the appreciation of the RMB led to a lower-than-expected improvement in gross profit margin. Research and development investment, sales investment, equity incentive payment, moving loss lead to the rapid growth of company expenses. The cost of key materials such as chips rose rapidly in the first three quarters of 2021, and the company's price increase measures failed to fully reflect the results of the reporting period; in addition, overseas revenue and gross profit margin were adversely affected by the appreciation of the RMB. During the period of the company, the cost increased rapidly compared with the same period last year, which lowered the company's net profit as a whole. the main reason is that the company has more confidence in the future development and has taken the initiative to make strategic reserves in advance, with higher R & D investment and sales investment; second, the company has implemented equity incentives this year, and the share payment for amortization in the second and third quarters has increased greatly compared with the same period last year; third, the overall relocation of the production line this year has resulted in more relocation losses. We believe that the cost increase is not sustainable and is expected to have a limited impact on the company's follow-up performance.
Starting from the professional field, the company will lay out the autopilot preloading market, which is expected to open up a new space for growth. On the basis of the existing market and technology, the company extends to the self-driving front loading market to provide customized services for the whole vehicle factory. The field of self-driving involves many technologies, such as specification-level hardware manufacturing, artificial intelligence, multi-sensor fusion, intelligent computing and so on. Ruiming has a layout in the related technologies in the above areas, and is expected to cooperate with car factories in the front market, such as intelligent cockpit, intelligent active braking, etc., which is expected to open up a new space for the company's performance growth.
Investment advice and profit forecast: due to short-term factors such as capacity relocation, falling gross profit margin and cost growth, the company's return net profit fell sharply in the third quarter of 2021 and is expected to improve quarter by quarter. We expect the company's homing net profit from 2021 to 2023 to be 2.00,3.16 and 402 million yuan respectively, an increase of-14.9%, 58.0% and 27.2% over the same period last year, corresponding to a PE valuation of 31, 19 and 15 times, maintaining a "buy" rating.
Risk hint
1. The recovery of domestic business is not as expected.
two。 The negative impact of the increase in the price of raw materials and the appreciation of RMB exceeded expectations.
3. Capacity relocation, the negative impact of the policy exceeded expectations.
