The Investment Incident Company announced its 2021 annual report. In 2021, the company achieved revenue of 1,272 million yuan, +54.96% year on year; net profit of returned mother was 205 million yuan, +85.12% year on year; net profit after deducting non-return to the mother was 190 million yuan, +89.41% year on year; basic EPS was 0.66 yuan/share, +71.22% year on year; net operating cash flow was 182 million yuan, +199.20% year on year.
Our analysis and judgment (1) R&D and design revenue exploded as scheduled, and the parts manufacturing business grew rapidly. In 2021, the company achieved revenue of 1,272 million yuan, +54.96% year on year. 21Q4 achieved revenue of 425 million yuan, +25.79%/+81.01% year-on-month respectively. The company focused on the NEV vehicle R&D business and achieved revenue of 1,010 billion yuan, +63.74% over the same period last year, accounting for 79.36% of revenue. The company's R&D business is highly tied to the NEV industry's upward cycle, and its main business growth is in line with expectations. The company's core components manufacturing business developed rapidly, achieving revenue of 64 million yuan, +363.59% year on year. The mass production and supply of V6 engines and speed reducers developed and incubated by the company was stable, and new customers continued to expand, laying the foundation for continued high growth in the future. By the end of the reporting period, the total number of R&D orders in hand was 1,787 billion yuan. The parts manufacturing and vehicle ODM business were progressing in an orderly manner, and the steady, moderate and positive trend in the company's performance is expected to continue.
(2) Gross margin remains high, and R&D investment continues to increase. In 2021, the company achieved net profit of 205 million yuan, +85.12% over the same period last year; of this, Q4 single-quarter net profit was 64 million yuan, +91.96%/+66.71% year-on-month respectively. The increase increased throughout the year and in a single quarter. The company's gross profit margin in 2021 was 37.32%, +3.64pct compared to the previous year, and the 21Q4 single-quarter gross profit margin was 11.67%, -8.55pct/-3.46pct respectively. Among them, the gross margins of NEV vehicle design products and fuel vehicle design products were 38.96%/36.21% respectively. The year-on-year ratio was +4.04pct/+4.88pct respectively. The gross margin continued to be high. The company's expenses rate in 2021 was 20.71%, of which the sales expenses rate was 2.51%, the year-on-year -1.59 pct, the management expenses rate was 7.33%, the year-on-year -2.03pct, and the R&D expenses rate was 9.65%, +5.75pct over the previous year. The company continued to maintain high investment in R&D to maintain its industry-leading technological advantage.
(3) The company lays out vehicle design+core component R&D and production+ODM OEM assembly, and diversified business development. Alte is deeply involved in automotive R&D and has successfully developed nearly 300 models for more than 60 customers. Its comprehensive R&D capabilities are at the leading level in China. Components such as engines, new energy powertrains, and speed reducers, which the company has intensively incubated over the years have entered the mass production stage, and have continued to develop cutting-edge projects such as modular platforms such as pure electric platforms for urban logistics vehicles, high-performance power unit systems such as 6G30T second-generation engine R&D projects, domain controller hardware, and electronic and electrical architectures such as underlying software. Intelligent intelligent manufacturing capabilities have continued to improve. The company plans to acquire Tianjin Bojun to expand the ODM OEM business, which will help the company improve its manufacturing capacity in all aspects, build a one-stop R&D delivery brand strength, enrich revenue sources, and supplement diversified development momentum.
Investment advice: We expect the company's net profit to be 332/436/578 million yuan respectively in 2022-2024, corresponding to EPS 1.00/1.31/1.74 yuan, corresponding to PE18X/14X/10X, maintaining the “recommended” rating.
Risk warning: 1. Risk that the equity transfer process falls short of expectations. 2. The risk that the release of production capacity will fall short of expectations. 3. The risk that the COVID-19 pandemic will adversely affect the automobile industry chain.
