Event: On April 27, the company released its 2021 annual report and 2022 quarterly report. The company's revenue in 2021 was 25,04709 million yuan, up 18.74% year on year; Guimu's net profit was 57.2553 million yuan, up 17.97% year on year; Q1 2022's revenue was 14.1674 million yuan, up 56.70% year on year, Guimo's net profit was 102,500 yuan, up 152.60% year on year, turning loss into profit for the first quarter; Q1 2022's smart mining business revenue was the same The year-on-year increase was 172.88%, and revenue from railway signal control and intelligent scheduling products in the ground industry increased 1001.48% year-on-year.
Net cash flow increased excessively, and the smart mining business achieved continuous high growth. Net cash flow from operating activities in 2021 was 506.93 million yuan, an increase of 2,211.45% over the previous year, mainly due to 1) the double increase in revenue and net profit, and a sharp increase in cash inflows from operating activities; 2) In order to improve the efficiency of capital utilization, the company strengthened supplier credit management and increased the proportion of bank notes paid. The smart mining business achieved high growth for two consecutive reporting periods. In 2021, the company's smart mining business revenue was 74.467 million yuan, an increase of 38.8% over the previous year; the 2022Q1 smart mining business increased 172.88% year on year.
The business structure continues to be optimized, and the share of high-margin businesses is rising steadily. The revenue and share of the company's three major businesses in 2021 was 74.467 million yuan, accounting for 29.95%, an increase of 4.52 pct over the previous year; the revenue of railway signal control and intelligent scheduling products in the ground industry was 114.4499 million yuan, accounting for 46.02%, a year-on-year decrease of 0.37 pct; revenue of information system integration and technical services was 597.547 million yuan, accounting for 24.03%, a year-on-year decrease of 3.69 pct. Meanwhile, revenue from underground signal control and intelligent scheduling products in Q1 mines increased 172.88% year on year in Q1 2022, revenue from railway signal control and intelligent scheduling products in the ground industry increased 1001.48% year on year, and revenue from information system integration business fell 34.25% year on year.
As the company's mining and railway businesses with high gross margins, they were 54.23% and 43.46% respectively in 2021. Combined with the continuous increase in its own share, the company's business structure was positively optimized.
Investment suggestions: In the context of the company's various business layouts such as intelligent mines, railways and urban rail, and in the context of the high boom in the smart mining industry and the gradual opening of railway certification to the market, the company has broader opportunities in intelligent coal mines and railway and urban rail informatization construction. Taking into account the niche and diversity of the company's industry, we believe that the overall market is in the blue ocean market. We forecast the company's revenue for 2022-2024 to reach 334, 505, and 733 million yuan respectively, and net profit of 0.75, 113, and 161 million yuan. The current stock price corresponding to 22/23 PE is 21X/14X. Maintain a “Recommended” rating.
Risk warning: The advancement of smart mines falls short of expectations; there is a risk that railway certification will be restricted; repeated outbreaks have brought about the risk of delivery delays.
