Event: on April 20, Chunzhong Science and Technology released its annual report of 2021 and the first quarter report of 2022. Among them, 2021 operating income of 468 million yuan, yoy-3.01%;2022Q1 operating income of 67 million yuan, yoy-22.45%. The net profit of 2021 is 83 million yuan, the net profit of yoy-35.22%;2022Q1 is-8 million yuan, and the performance of yoy-170.50%, is lower than we expected.
The landing of large orders in the second half of the year was lower than expected, and the performance was under short-term pressure: sales orders continued to grow in the first half of 2021 compared with the same period last year, but the second half of the year was affected by the lower-than-expected arrival of large orders. Operating revenue in 2021 fell 3.01% from the previous year. Due to the increase in labor costs, self-research chip investment and the rise in the comprehensive corporate income tax rate, the net profit of returning home decreased by 35.22% over the previous year, of which the salary of employees increased by 26.0393 million yuan, various taxes paid increased by 10.6795 million yuan, R & D investment was 66.1061 million yuan, and R & D expenses accounted for 14.12%, an increase of 1.36 pp over the previous year.
Q1 in 2022, due to the impact of the epidemic, there is still a decline and delay in newly signed orders and project delivery. We believe that the short-term performance of Chunzhong Technology is under pressure due to the landing of orders, but we continue to be optimistic about the prosperity of audio and video business. Chunzhong Technology is the leader of audio and video display control, and we are optimistic about the development of the company for a long time.
Seize the opportunities for the development of the display and control market, strengthen the investment of technology and talents, and consolidate the leading advantage:
With the introduction and implementation of policies such as the new infrastructure, the Action Plan, the 14th five-year Plan and the landing of ultra-high-definition video, the market demand for display and control has been expanded and the endogenous development power of the industry has been stimulated. At the same time, as the industry's leading provider of professional audio and video display and control solutions, the company plays an indispensable role in the UHD video industry. At present, the company continues to strengthen its investment in R & D and sales, and establishes a marketing and operation and maintenance network with high coverage and rapid response. There are two software and hardware R & D centers in Beijing and Wuhan, and chip R & D bases in Hefei to continuously improve R & D capabilities. 24 new patent applications have been added in 2022, with a number of industry-leading technologies in the field of display and control. At the same time, the company has steadily developed its own chip project. In the future, the company will continue to increase investment in independent controllable audio and video processing chips, and strive to improve the competitive advantage of domestic audio and video control products.
Profit forecast and investment rating: according to the recent financial data and business situation, we have lowered the net profit from 2022 to 2023 from 251 million yuan and 335 million yuan to 123 million yuan and 152 million yuan, estimated to be 191 million yuan in 2024, EPS is 0.66,0.81 yuan and 1.02 yuan respectively, and the corresponding PE valuation is 19x, 16x and 12x respectively. With the gradual enrichment of the variety of products, the sales channels are improved. Benefiting from the industry development dividend, we continue to be optimistic about the future development of Chunzhong Science and Technology and maintain the "buy" rating.
Risk hint: downstream customer order demand is lower than expected risk; the company's technology update is not as expected as expected risk; after the company's scale expansion, operation and management is not as expected as expected risk.