2021 and 1Q22 performance are slightly lower than we expected
The company's 2021 income was 866 million yuan, + 27.9% compared with the same period last year; the net profit was 70 million yuan,-44.4%; and the non-net profit was 36 million yuan,-68.0% compared with the same period last year. 4Q21 income 270 million yuan, year-on-year + 14.9%, month-on-month + 25.8%; return to the mother net profit of 13 million yuan,-63.3%, month-on-month + 108.2%. 1Q22 income 230 million yuan, year-on-year + 22.6%, month-on-month-13.4%; return to the mother net profit of 13 million yuan,-58.2% year-on-year, month-on-month-3.3%.
The reasons for the increase in revenue and the decline in performance are as follows: 1) the afterprocessing products of national six diesel engines have been introduced to the market for a short time, and the scale effect has not yet been realized; 2) the proportion of sales of gasoline engine afterprocessing products with low gross profit margin has increased; 3) the acquisition of ABF has brought a substantial increase in management costs, with an expense rate of 21.8%, 21.4% during the 1Q21/1Q22 period, and + 3.6 pptmax 6.5pptpoli4 compared with the same period last year. 4) scrapped or deducted from the restructuring of national five products.
Trend of development
Under multiple disturbances, the performance is under pressure, and the profitability and capital situation show a trend of improvement. The company's 1Q21-1Q22 homing net interest rate is 16.6%, 9.3%, 3.1%, 5.1%, 5.6%, and the profitability reaches a low point in 3Q21 and shows an increasing trend from 4Q21. In 21 years, the company's operating cash flow was 1.766 million yuan, turning negative to positive; monetary funds were 290 million yuan, + 62.6% compared with the same period last year, and the capital situation was significantly improved. We believe that with the scale effect of the company's products and the deepening of cost reduction and efficiency work, and the disappearance of non-recurrent items such as mergers and acquisitions and asset impairment, the company's profitability and capital situation have more room for improvement.
Against the background of a sharp decline in the industry, revenue maintained positive growth and market share continued to expand. According to data from the China Automobile Association, 4Q21/1Q22 domestic light truck sales of 46.7% and 482% were 19.6% and 14.3%, respectively, compared with the same period last year. Heavy truck sales were 231%, 16.2%, 57.6%, 56.5% and 42.8%, respectively. The industry as a whole is in the off-season. The company's 4Q21/1Q22 operating income is + 14.9% Universe 22.6% in 21 years to expand Yuchai, Chery, Weichai and other new customers, and the market share continues to expand, reaching 12.91% in the market share of light diesel trucks in 2021, an increase of 1.40ppt over last year.
Motor vehicle country 6 and non-road country 4 open the market space for post-processing, and the market share of the company is expected to further increase under the domestic substitution logic. The upgrading of the sixth national standard promoted a substantial increase in the value of the catalyst bike, and the non-road national fourth standard expanded the incremental market, providing strong support for the downstream demand of the company. We believe that the catalyst market is expected to deduce the domestic substitution logic, and the company has accumulated rich experience and related technology in the light vehicle market, and is expected to quickly seize the heavy vehicle and off-road market, and achieve a double rise in market share and performance.
Profit forecast and valuation
Considering the disturbance of the epidemic and the off-season of commercial vehicles as a whole, we lowered our profit forecast for 2022 by 31.3% to 160 million yuan, and introduced a profit forecast of 250 million yuan for 2023. The current share price corresponds to a price-to-earnings ratio of 13.7 times 2023 / 8.7 times 2023. Maintain the outperform industry rating, and lower the target price by 36.3% to 40 yuan, corresponding to 2022 pebble 20.1 times / 12.8 price-to-earnings ratio in 2023, which has 47.0% upside compared to the current stock price.
Risk
Raw material price fluctuation risk; company cash flow risk; customer concentration risk.