Event: on March 30, 2022, the company released its 2021 annual report. In 2021, the company achieved operating income of 1.622 billion yuan, an increase of 15.08% over the same period last year, and the net profit attributed to shareholders of listed companies was 191 million yuan, an increase of 14.35% over the same period last year, accounting for 11.76% of operating income.
Comments: the company's annual performance growth is in line with expectations. It is optimistic that under the trend of rising permeability of new energy vehicles, the company and its subsidiaries related products such as electronic pumps, gearbox pumps, motors and EPS control units are mass produced and released profits, bringing a new level of growth for performance.
Increase R & D investment, expand production capacity of projects under construction, and promote intelligent manufacturing to reduce costs and increase efficiency. The R & D expenditure in 2021 was 105 million, an increase of 13.75% over the same period last year. The company has stepped up the research and development of new product projects and entered the field of new energy vehicles. The number of projects under construction increased by 78.56% over the end of last year. The progress of three of the four important projects has reached 90%, and with the gradual landing of projects under construction, production capacity is expected to increase significantly. In addition, the company continues to promote intelligent manufacturing, has set up more than 40 automatic production lines, the full implementation of APS, MES and other systems to reduce costs and increase efficiency.
The subsidiary realizes the large-scale mass production of the EPS control unit of the electric power steering system, and has a broad application prospect. Yilida, the actual holding company of the company, is the leader of domestic automotive EPS, and Dongjia Intelligence, a subsidiary of the company, is the leading supplier of EPS control system in China, which has realized the large-scale mass production of EPS control unit and has the scale application of more than 5 million vehicles. In intelligent driving and intelligent travel business, Dongjia Intelligent ECU products equipped with intelligent driving fully redundant steering system have been applied in unmanned airport ferry and smart city street scene. At the same time, Hainan Dongjiang, a subsidiary of the company, is allowed to start a smart car road test in Hainan Province, and its project vehicles are equipped with L4 adaptive EPS and ECU provided by Dongjia Intelligence.
We will deepen new product development and lay out new energy vehicles to bring new levels of growth. The company accelerates the layout of the new energy vehicle market and has developed a rich product line according to different downstream needs: 1) Electronic pumps: in 2021, the company developed Liuzhou Songzhi's electronic water pumps and other projects. at present, this kind of products already have Cummins, Nissan, BYD, SAIC and other well-known customers at home and abroad. 2) automatic gearbox pumps: the company's products already have domestic and foreign well-known customers such as Toyota Motor Corp (new energy), Volvo, BYD, Zhuzhou CRRC (new energy), and are expected to cooperate with NIO Inc. Automobile, Weima Automobile and other customers in the future. In 2021, the business income of transmission pump products increased by about 50% compared with the same period last year. 3) Motor: in the second half of 2021, Dongxingchang Technology, a subsidiary of the company, developed motor products on lidar, which has been applied to a domestic new energy vehicle head enterprise. and obtained many projects from domestic head lidar manufacturers, and is expected to enter a large-scale mass production stage in 22 years. In addition, EPS motor has realized the matching supply of corresponding new energy vehicle models, and downstream customers mainly include Changan New Energy, Naha Automobile and so on. With the mass production of many customers, the company's new product market still has great room for growth in the future.
Investment advice: be optimistic about the growth prospects of the company under the background of increasing the penetration of new energy vehicles. The company is expected to return to the parent net profit of 2.50,3.27 and 426 million yuan from 2022 to 2024, with a target price of 46.58 yuan, maintaining a "buy" rating.
Risk hint: the penetration rate of new energy vehicles is not as expected, the capacity expansion is not as expected, the penetration of downstream customers is not as expected, and sales are not as expected.