2021 performance is slightly lower than we expected.
The company announced its 2021 results: income 860 million yuan, year-on-year + 5.4%; return to the mother net profit 98.41 million yuan, year-on-year-5.6%; corresponding 4Q21 income 290 million yuan, year-on-year + 4.8%, month-on-month + 50.4%; return to the mother net profit 28.02 million yuan, year-on-year-20.6%, month-on-month + 30.6%. Slightly lower than we expected, mainly due to the rising cost of raw materials, chip shortage, R & D investment continues to increase and other factors.
Trend of development
Steady revenue growth, a variety of factors lead to profit pressure. The company's 21-year income is 860 million yuan, + 5.4% compared with the same period last year. Of these, the income from the sensor and accessories business was 210 million yuan, + 6.7% compared with the same period last year; the income from fuel system accessories was 480 million yuan, + 5.6% from the same period last year; the income from the automobile interior accessories business was 83.63 million yuan,-19.6% from the same period last year; and the income from new energy components was 28.16 million yuan, + 26.9% from the same period last year. The company's 21-year gross profit margin is 25.4%, year-on-year-1.3pct; net profit rate is 11.5%, year-on-year-1.3pct, mainly affected by the rising price of raw materials, chip shortage and other factors. The company's 21-year management expense rate of 5.7%, year-on-year + 0.6pct, is mainly due to the increase in human resources costs and other costs brought about by the acquisition of two subsidiaries (Changzhou Huaxuan and Kunshan Oliwei).
We believe that the company has abundant orders in the field of new energy sensors and motor insulation rings, electronically controlled filter components and other new energy components, which will continue to expand for 22 years, leading to revenue and profit growth.
Expand the scope of business, power car networking. The company issued an additional 350 million yuan in August 21 to carry out the construction project of commercial vehicle networking system, and issued a notice on April 7, 22 to increase the company's business scope of "manufacture of all kinds of automotive electronic products and intelligent vehicle equipment", and continue to lay out the vehicle networking business. The company's vehicle networking products have been ordered by commercial vehicles and are in the process of market development. we believe that the vehicle networking business is expected to become a new performance growth point of the company.
Under the background of electric intelligence, rotary sensor and MEMS pressure sensor benefit, and domestic replacement is under way. With the upgrading of electrification, the three-electric system needs additional sensors, batteries and other components to improve the performance of sensors; at the same time, electrification drives intelligence, and the sensors used in intelligent chassis, brakes, thermal management and so on need to be added. We believe that the trend of electric intelligence increases the performance and quantity requirements of automotive sensors, and the industry continues to expand. The rotary sensor and MEMS pressure sensor are the key electronic components of new energy vehicles. The company grasps the relevant core technology through the acquisition of Changzhou Huaxuan and Longwei technology to achieve the synergy of parent-subsidiary resource integration. We believe that the company is expected to deduce the domestic substitution logic by virtue of the self-sufficiency ability of the industrial chain, customer resources and service advantages.
Profit forecast and valuation
Due to the increase in the price of raw materials and the shortage of chips, we have reduced the 23-year net profit of 22max by 19.5% to 162 million yuan / 235 million yuan. The current share price corresponds to a 23-year price-to-earnings ratio of 26.9 times / 18.6 times earnings. To maintain an outperform industry rating, we lowered our target price by 14.3% to 12.00 yuan corresponding to 36.6 times 22-year earnings and 25.2 times 23-year earnings, which is 35.9% higher than the current stock price.
Risk
Car networking business is not as expected, sensor new business development is not as expected, and raw material prices continue to rise.