Revenue increased by 11.8% over the same period last year, while profit fell by 35%:
In 2021, the company recorded operating income of 2.31 billion yuan, an increase of 11.8% over the same period last year; realized gross profit margin of 27.6%, down 5.3% from the same period last year; profit attributable to owners of the parent company was 220 million yuan, down 35.3% from the same period last year; and earnings per share were 0.21 yuan. it is proposed to pay a final dividend of 1.83 per share, with a dividend rate of 30 per cent for the year.
There are plenty of orders on hand, and future revenue expectations are more optimistic:
In 2021, the company received new orders of about 3.2 billion yuan, of which 34% were new energy orders. By the end of last year, the total amount of existing contracts of the company in the next five years was about 10.48 billion. According to the order visibility data released by the company, the company confirmed 2.6 billion orders in hand in 22 years, with 2.62 billion forecast orders on hand, slightly lower than expected at the end of last year, but the total orders are sufficient, providing a guarantee for steady revenue growth.
Supply chain and labor costs lead to a decline in gross profit margin:
In 2021, the company's gross profit margin was 27.6%, down 5.3% from the same period last year. In the last half of the year, the gross profit margin was 32.7% in the first half of the year and 22.3% in the second half of the year. The main reasons for the decline are:
Since the second quarter, the company has been facing pressure from chip shortages, rising raw material prices, increased logistics and labor costs, and operating losses at factories in Mexico, resulting in a 20.7% increase in production costs.
With the transfer of raw material pressure, Mexican factories have turned from losses to profits, and gross profit margins are expected to gradually recover:
In terms of raw material costs, the prices of major raw materials remain high at present. Although there is still uncertainty in the global political economy and high raw material prices may still put some pressure on the company's gross profit margin, the company has discussed with its main customers, most of whom have agreed to help share the increase in raw materials and freight costs.
In addition, Mexico's income has increased significantly compared with the end of last year; on the profit side, excluding the impact of the exchange rate, there is an average monthly after-tax profit of 30-4 million RMB. Taken together, the gross profit margin in 2022 is expected to be about 31-32%.
Lower the target price to HK $3.3 and maintain the "buy" rating:
We predict that the EPS of the company from 2022 to 2024 will be 0.33 yuan 0.40 won 0.48 yuan respectively. As there is still some uncertainty in the supply chain and raw material prices this year, the target price is lowered to HK $3.30, equivalent to eight times PE in 2022, and there is room for 56 per cent increase from the current price to maintain the buy rating.