Main points of investment: the company announced its annual report for 2021, with an operating income of 1.62 billion yuan, an increase of 15.1% over the same period last year, and a net profit of 190 million yuan, an increase of 14.4% over the same period last year. Of this total, 21Q4's single-quarter operating income was 350 million yuan, down 21.6% from the same period last year, and its net profit was 60.11 million yuan, an increase of 61.9% over the same period last year, in line with market expectations.

The decline in Q4 revenue was mainly dragged down by the production and sales of commercial vehicles, but benefited from the fact that products and clients continued to deliver full-year results in line with expectations. 21Q4 domestic light truck production decreased by 19.2%, heavy truck production decreased by 59.3%, and the company's diesel oil pump domestic market share reached 40%. Q4 revenue was greatly affected by the decline in commercial vehicle production. With the realization of the company's product-side and client-side breakthroughs in the past 21 years, the annual revenue increased by 15.1% compared with the same period last year, in line with expectations. The products are expanded from traditional diesel and gasoline engine pumps to gearbox pumps, electronic water / oil pumps, motors, and to intelligent electric products such as lidar motors, line-controlled EPS motors, hybrid gearbox pumps, etc., with stable clients and breakthroughs to mainframe factories and construction machinery customers at home and abroad.

Q4 gross profit margin under pressure on the upstream price continued to rise, 21 the profit side of the performance in the upstream price rise in line with expectations, the company actively expand production to cooperate with abundant orders on hand. (1) the upstream price continued to rise in 21 years, aluminum and steel prices reached highs in September-October 21, the average price of 21Q4 aluminum / steel increased by 30% and 25% respectively compared with the same period last year, the international shipping price continued to increase, and was at a high level in June-October 21. Considering inventory turnover, gross profit margin was significantly under pressure in 21Q4, and decreased by 7.9pct to 17.2% month-on-month. For the whole year, the 21-year gross profit margin decreased by 2.7pct to 25.1% compared with 20 years, and the net profit rate decreased by 0.3pct to 11.7%. At the same time, considering the accounting change freight deducting the cost from the sales expenses, the company's profit side performed commendably in the context of upstream price increases and lack of core in the industry in the past 21 years. (2) in addition, the company's contract liabilities (mainly received in advance) increased by 76.5% to 5.95 million yuan compared with the same period last year, confirming that there are plenty of orders on hand. At the same time, projects under construction increased by 78.6% to 116 million yuan compared with the same period last year, matching the delivery of future orders.

The company adheres to the strategic goal of "energy saving, integrated modularization, electrification, new energy and lightweight" to accelerate the expansion of new electric intelligent products and usher in the performance of new products. ① automatic gearbox pump: has been equipped with many well-known customers at home and abroad, hybrid gearbox pump supporting BYD, Ericsson, Honda, Nissan and so on, will be on a large scale in 22 years ② electronic pumps: including electronic water / oil pumps for commercial vehicles, electronic water pumps for passenger vehicles, electronic water pumps for energy storage and heat management, etc., which already have well-known customers at home and abroad, such as Cummins, Peca, Nissan, Zhuzhou CRRC (New Energy), BYD, SAIC, Changan and so on. ③ Motor: Dongxingchang Technology, a holding subsidiary, has professional motor technology with independent intellectual property rights as its core. In addition to supporting electronic pumps, lidar motor 21H2 begins to support new domestic forces and actively open up the international market. It will be mass produced in 22 years. In addition, EPS Motor begins to supply new forces and other customers. ④ intelligent driving executive layer control system: with Zhuzhou Yi Lida to establish Dongjia Intelligence, prospective layout intelligent driving solution, the core product is intelligent driving executive layer control unit ECU, which has realized more than 5 million vehicle applications. At the same time, Dongjia Intelligent self-developed intelligent driving execution system (L4 adaptation EPS) and control module (ECU) suitable for L4 intelligent driving have been matched and sold on unmanned ferry buses / unmanned buses. Operating income can be generated in the future.

At the same time, the company participates in the establishment of Hainan Dongjiang and Sanya Yazhou District to build intelligent driving test base and smart travel project, and Dongjia Intelligence provides some products. Taken together, many new products will be mass-produced in new and old customers in the past 22 years, and the proportion of revenue in new categories is expected to achieve a gradual increase of 2%, 14%, 27% in 21-23 years.

Downgrade the 22-year profit forecast, raise the 23-year profit forecast, and maintain the buy rating. Raise the company's 2022-2023 revenue forecast to 21.6yuan and 2.77 billion yuan (before the adjustment is 21, 2.52 billion yuan), increase the 2024 revenue forecast to 3.48 billion yuan, 2022-2024 corresponding to the home net profit forecast is 2.43,3.34, 406 million yuan (before adjustment 2022-2023 is 2.84 yuan, 330 million yuan respectively), corresponding to PE 15, 11, 9 times, maintain the buying rating.

Core risks: lack of core recovery is not as expected; epidemic prevention and control is not as expected; order climbing is not as expected; raw material prices continue to rise.