Continuous verification of industrial Internet platforms to maintain “buy” ratings
The company released its report for the third quarter of 2021. Revenue for the third quarter alone increased 30.0% year on year; Guimu's net profit increased 53.3% year on year. The electronics industry is booming, and the company's innovative business continues to be verified. We keep our profit forecast unchanged. We expect net profit to the mother for 2021-2023 to be 996, 11.39, 1,391 billion yuan, and EPS is 0.91, 1.09, and 1.33 yuan/share. The current stock price corresponding to PE is 16.2, 13.6, and 11.1 times, maintaining the “buy” rating.
Event: The company released the third quarter report of 2021
In the first three quarters, the company achieved revenue of 16.45 billion yuan, an increase of 43.1% over the previous year, and achieved net profit of 709 million yuan to the mother, an increase of 53.6% over the previous year. In the third quarter alone, revenue was 6.46 billion yuan, an increase of 30.0% over the previous year, and net profit of the mother was 276 million yuan, an increase of 53.3% over the previous year.
Recovering economy+structural optimization, high performance growth
(1) In terms of revenue, the electronics industry is booming, and the company has fully benefited as a leading electronic component distribution leader. Revenue increased 30.0% year-on-year in the third quarter alone, further increasing market share. (2) In terms of gross margin, the gross margin for the first three quarters was 11.6%, an increase of 1.74 percentage points over the previous year, mainly due to the optimization of the company's distribution business structure and the high growth of innovative businesses with relatively high gross margins. (3) In terms of profit, profit increased 53.3% year-on-year in the third quarter alone, faster than revenue growth. (4) In terms of cash flow, net cash flow from operating activities decreased by 61.5% year-on-year in the first three quarters, mainly due to the rapid growth of the company's distribution business and the business cycle of stocking and repayment.
Innovative businesses are continuously verified, and the industrial Internet has entered a stage of high growth. The company's innovative business Huaqiang Electronic Network is an industrial Internet platform for the long-tail spot market. According to the company's three-quarter report forecast, based on the same estimation, Huaqiang Electronic Network's revenue increased by more than 450% in the first three quarters, and Guimu's net profit increased by more than 320%. According to documents from the Ministry of Industry and Information Technology, the target for domestic electronic component sales in 2023 is 2.1 trillion yuan, and the corresponding long-tail spot market will reach 100 billion yuan, and the space is vast. At present, digital trading of electronic components is still in its infancy. The company is deeply involved in the electronics industry, has accumulated customer resources and transaction data for more than ten years, and has first-mover and resource advantages. After more than a year of integration and improvement, the viability and growth of the company's innovative business has been fully verified, and the industrial Internet platform has entered a stage of high growth, which can be expected in the future.
Risk warning: The electronics industry is declining; the development of online platforms falls short of expectations.
