Event: on April 28, 2022, the company released its quarterly report for 2022. 2022Q1 realized operating income of 409 million yuan (year-on-year-1.63%), net profit of 25.3159 million yuan (year-on-year-37.24%), non-return net profit of 23.629 million yuan (year-on-year-40.04%), and basic earnings per share of 0.04 yuan per share.
The first quarter is the company's traditional off-season, and the cost pressure affects profits. 2022Q1's gross profit margin is 34.20% (year-on-year-2.46pct), the expense rate is 26.96% (year-on-year + 2.71pct), and the sales expenses, management expenses, financial expenses and R & D expenses are 2666.05 / 5168.25 /-94.85 / 32.9581 million yuan respectively. Among them, R & D expenses increased by 34.03% over the same period last year, mainly due to the increase in investment in scientific research by subsidiary Hanzhong 101; interest income decreased by 1.051 million yuan compared with the previous period, mainly due to the decrease in time deposit interest income of the parent company and the increase in loan interest expenses in Hanzhong 101 in the current quarter.
The turnover rate has declined and automation projects have continued to move forward. The net cash flow generated by 2022Q1's operating activities was-175 million yuan, a decrease of 92.4838 million yuan compared with the same period last year. As of the end of 2022Q1, the company's contract liabilities totaled 89.3938 million yuan, a decrease of 43.75 percent compared with the end of last year, mainly due to the parent company's income from the recognition of contract performance obligations received in advance of Zemic Europe B.V in the current quarter, resulting in a decrease in the balance of contract liabilities; prepaid accounts totaled 47.3274 million yuan, an increase of 89.88 percent over the end of last year, mainly due to a substantial increase in material payments in the current quarter. Accounts receivable 906 million yuan (year-on-year + 37.28%), accounts receivable turnover 0.49 times (year-on-year-26.87%), inventory turnover rate 0.38 times (year-on-year-11.63%), turnover pressure increased.
At the end of 2022Q1, the company is under construction of 174 million yuan (year-on-year + 273.74%), an increase of 11.8426 million yuan over the beginning of the year. The company continues to promote the transformation and construction of automatic production lines for key projects.
Profit forecast: we estimate that the EPS of the company in 23 years is 0.67, 0.80 yuan per share, respectively. Combined with the comparable company's PE valuation, we give the company a valuation of 17-22 times PE in 2022, with a reasonable value range of 11.32-14.65 yuan, maintaining a "better than the market" rating.
Risk hint. The progress of key R & D projects is not as expected, and the market competition is intensified.