Event
The first quarterly report of 2022 announced that revenue increased by 23.5%, while return profit fell slightly by 4.01%.
On the evening of April 26, 2022, long Magnetic Technology released a report for the first quarter of 2022. During the reporting period, the company achieved a total operating income of 224 million yuan, an increase of 23.50% over the same period last year. The net profit belonging to shareholders of listed companies was 27.9082 million yuan, down 4.01% from the same period last year. Net profit belonging to shareholders of listed companies after deducting non-recurring gains and losses was 20.8115 million yuan, down 21.70% from the same period last year; basic earnings per share was 0.39 yuan. The company's revenue in the first quarter was basically in line with expectations, and its profit was lower than expected.
Brief comment
Maintain the pace of capacity expansion, increase capital expenditure, debt growth. The company maintains the pace of capacity expansion and will focus on promoting the production progress of 4000 tons of permanent magnet wet piezomagnetic tiles in Vietnam Longji Phase II, the construction of the Lujiang plant in Hefei, the production capacity of the soft magnetic industry chain project, and the increase in capital expenditure. By the end of the first quarter of 2022, the company had borrowed 162 million yuan in short-term loans, up 58.89 percent, and 61.7876 million yuan in long-term loans, up 619.46 percent. Its liabilities totaled 447 million yuan, up 57.88 percent.
Rising costs are a necessary path for enterprises to expand production capacity and upgrade products. In the first quarter of 2022, the company's sales expenses and management expenses decreased slightly compared with last year, R & D expenses increased by 92.99% to 14.9016 million yuan, and financial expenses increased by 4.31 times to 3.7383 million yuan, of which interest expenses were 2.1267 million yuan, an increase of 138.0%. With the increase of costs and R & D costs brought about by the capacity expansion of enterprises, the company not only ranks first in the world in terms of production capacity, but also draws closer to TDK in the level of product technology, so the growth of R & D investment is the only way.
High-performance ferrite permanent magnet production capacity to maintain expansion, the scale of production capacity in the forefront of the industry, the future sword is the first in the world. The company is a scarce manufacturer of high-end ferrite permanent magnet materials, and by the end of 2021, it has formed a scale of high-performance permanent ferrite with a production capacity of 33,000 tons per year. The company plans to increase the annual ferrite permanent magnet production capacity by 10,000 tons / year by the end of 2024 and reach 60,000 tons / year by 2024, surpassing the current global leader TKD in Japan. The production capacity increment in 2022 mainly comes from the production of Vietnam Longji Phase II 4000 ton production line in the second half of 2022, and the production capacity of Lujiang plant has increased to 10,000 tons / year.
We will actively lay out the field of soft magnetic and new energy components to open up the space for growth. Company layout soft magnetic and device production, powder, magnetic core, inductor trinity all-round development. Layout of 6000t high-performance soft magnetic materials, has formed a metal magnetic powder core production capacity of 3000 tons / year, will reach 5000 tons in 2022; soft magnetic ferrite design capacity of 6000 tons / year, under construction, plans to put into production in the third quarter of 2022; invest 700 million yuan to build a high-frequency magnetic device project to build the whole industry chain of soft magnetic materials. With the development of photovoltaic, new energy, energy storage and other fields, the demand for soft magnetism and inductance will increase greatly, and the company will open up the room for growth.
Profit forecast and investment advice
The company's 2022-2024 net profit is expected to be 163 million, 221 million and 297 million yuan, an increase of 24.2%, 35.7% and 34.4%, corresponding to the current estimated PE of 17.1 times, 12.6 times and 9.4 times, respectively. The growth rate of micro-special motors and China's new energy industry is high, and the demand for high-performance permanent magnet ferrites, soft magnets, inductors and other components will increase greatly. As the first high-end permanent magnet material manufacturer to master the advantages of technology and customer certification, the company will benefit from the growth of high-end permanent magnet industry and enter into the field of soft magnetic and new energy components. The company is currently rich in project reserves, with high growth, given a "buy" rating.
Risk hint
The construction progress of the project is not as expected, and the epidemic repeatedly affects the demand.