Event: the company released its annual report for 2021, with operating income of 811 million yuan in 2021, an increase of 41.02% over the same period last year, and a net profit of 76 million yuan, an increase of 33.42% over the same period last year, which was lower than our expectation, mainly due to the increase in the price of raw materials and the impairment of assets in the fourth quarter of 2021.
Breakthroughs have been made in chemical sub-capacity equipment, and the proportion of revenue in Ningde era has expanded.
The lithium battery equipment business continued to grow, with an operating income of 643 million yuan in 2021, an increase of 27.35% over the same period last year. In terms of orders, the company has obtained orders of 512 million yuan since the Ningde era in 2021, an increase of 138% over the same period last year. Among them, the chemical component equipment is 142 million yuan, which marks the company's further expansion of the lithium downstream equipment industry chain. In January 2022, the company once again obtained an order of 146 million yuan, including chemical capacity equipment, from the Ningde era. Compared with testing equipment, the unit investment of chemical sub-capacity equipment is higher, which will become an important growth point of the company's business in the future. In terms of customer structure, the Ningde era accounted for 48% of the company's revenue in 2021, an increase in 8.3pct compared with 2020. It is mainly due to the further appearance of the head effect in the field of power battery. In terms of gross profit margin, the gross profit margin of lithium power equipment plate decreased to 41.58%, mainly due to changes in product structure, the proportion of 3C products with high gross margin decreased.
The operating income of the test service business reached 116 million yuan, an increase of 155.73% over the same period last year. Mainly in close cooperation with Ningde era, the company not only provides battery performance testing laboratory service contracting services for Ningde era, but also provides strong support for its testing business in the process of research and development. Plate gross margin increased 13.54pct to 61.09%, testing service is not only an important source of profit for the company, but also an important channel for the company to maintain stickiness with major customers. Relying on the cooperation in the front-end R & D phase, it also helps the company to continuously improve the competitiveness of its products.
Other business income was 46 million yuan, an increase of 105.83% over the same period last year. We think it is mainly driven by the energy storage business.
Judging from the operation of the nebula in the era of the joint venture, the revenue of the nebula in 2021 was 103 million yuan, an increase of 145% over the same period last year. The company has a continuous layout in the field of energy storage and has great potential for business growth.
We will continue to increase investment in R & D and bind equity incentives to the interests of the team. In 2021, the company invested 138 million yuan in R & D, accounting for 17.07% of revenue, an increase in 2.81pct compared with 2020. The company issued a 2021 restricted stock incentive plan (draft), which requires that the operating income in 2022 be not less than 1.3 billion yuan, and the cumulative operating income in 2022 and 2023 be no less than 3.3 billion yuan.
Profit forecast, valuation and rating: the company relies on the extension of the product line from testing equipment to chemical subcapacity, and the amount of orders increases significantly. Due to the further increase in the revenue share of major customers and changes in the product structure, we downgrade the company's 2022-2023 net profit of 22.7%, 25.9%, 25.9% to 180, 269 million yuan, with a projected net profit of 414 million yuan in 2024, and the current stock price is 29 times of PE in 2022. The company binds major customers, has a clear growth momentum, and maintains a "buy" rating.
Risk tips: macroeconomic cycle fluctuations; tax preferential policy changes; raw material cost fluctuations and so on.