Event: according to the company's annual report for 2021, the company achieved an operating income of 2.647 billion yuan in 2021, an increase of 89.47% over the same period last year, and a net profit of 607 million yuan, an increase of 50.79% over the same period last year. The net cash flow of business activities was 335 million yuan, an increase of 44.71% over the same period last year. The company also released a report for the first quarter of 2022 that 2022Q1 realized operating income of 762 million yuan, an increase of 44.55% over the same period last year, and a net profit of 180 million yuan, an increase of 19.50% over the same period last year.
The strong demand downstream superimposed to expand the domestic market, the company's performance has increased significantly: since 2020, the epidemic has given rise to consumer demand for personal portable travel products, and the popularization and promotion of electric bikes have been further accelerated. Benefiting from the increase in downstream demand, the company's electric bicycle motor business revenue increased significantly in 2021, achieving revenue of 1.54 billion yuan, + 57% year-on-year, of which 550000 sets of middle motors were sold, + 39% of the same period last year, and 1.57 million sets of hub motors were sold, + 82% of the same period last year. In addition, the company began to expand the domestic traditional electric bicycle market in 2020. at the end of 2020, Bafang Tianjin was officially put into production. In 2021, the sales of all-in-one wheel motors reached 2.86 million, with a revenue of 480 million yuan.
In 2021, the gross profit margin was under pressure, but 21Q4 began to improve gradually: in 2021, the company's gross profit margin was 34.3%, year-on-year-9pct, mainly due to two factors: (1) the change in revenue structure, the proportion of domestic traditional electric bicycle business increased significantly in 2021, and the gross profit margin of this part of the business was low, which lowered the company's overall gross profit margin. (2) due to the rise in commodity prices, the raw materials of electric bicycle drive system generally rise, and there is some pressure on cost control. On a quarterly basis, the company's gross profit margin reached a low of 30.5% in 2021Q3 and has gradually improved since then, with 2021Q4/2022Q1 gross margins of 34.3% and 35.8% respectively.
Raise funds to accelerate production expansion, help the company accelerate its performance growth: in January 2022, the company issued a revised version of the fixed increase plan, which intends to raise 1.2 billion yuan. Used in electric two-wheeler drive system (Suzhou) manufacturing project, electric vehicle drive system (Tianjin) manufacturing project, R & D and testing center construction project. After the project reaches production capacity, Suzhou plant will increase annual production capacity of 900000 intermediate motors, 1.1 million hub motors and 1.2 million traditional motors, while Tianjin plant will increase annual production capacity of 550000 hub motors and 3.3 million traditional electric vehicle motors.
At present, the penetration level of electric bicycles is low around the world, and the market still maintains the trend of rapid development; with the introduction of new national standards and the development of shared electric bicycles, traditional electric two-wheelers have also ushered in changes. In this context, the company's accelerated production expansion will help to fully grasp the market opportunities.
Earnings forecast, valuation and rating: strong demand in the downstream market, the company accelerated production expansion, raised the company's 22-23 net profit forecast (8% up 13% respectively), added 2024 forecast, the company's 2022E-2024E net profit is expected to be 8.4 PE 11.1 billion yuan, the current share price is corresponding to 22-24 PE is 22-17-14 times, maintaining the "overweight" rating.
Risk tips: changes in the international trade environment; increased market competition; technology and product iterations reduce the company's competitiveness.