Events:
Tenglong shares released the 2021 annual report and the first quarterly report of 2022: the company's operating income in 2021 was 2.207 billion yuan, + 24.53% compared with the same period last year; the net profit attributable to shareholders of listed companies was 90 million yuan,-41.95% compared with the same period last year; after deducting the net profit attributable to shareholders of listed companies, the net profit was 74 million yuan,-47.43% compared with the same period last year. In 2022, the operating income of Q1 company was 563 million yuan, + 15.73% compared with the same period last year; the net profit belonging to shareholders of listed companies was 28 million yuan,-38.35% compared with the same period last year.
Main points of investment:
Profits were under pressure for the whole year of 2021, and Q1 profitability picked up month-on-month. Q4 in 2021, the company achieved operating income of 782 million yuan, year-on-year + 19.26%, month-on-month + 79.36%; net profit-12 million yuan; gross profit 17.44%, month-on-month-8.36pct; net profit-2.04%, month-on-month-10.15pct. For the whole year, the company's gross profit margin and net profit margin are 24.18% and 5.12% respectively, compared with the same period last year.-5.41/-5.52pct, the pressure is obvious. Mainly due to the increase in aluminum prices and freight prices during the year, in addition, the increase in labor costs, exchange losses and new source power investment gains and losses also had a certain impact on profits. Q1 gross profit margin in 2022 is 22.30%, month-on-month ratio + 4.86pct; net profit rate is 5.96%, month-on-month ratio + 8.00pct, profitability has obviously improved, mainly because the company has put forward a strict cost control system in research and development, manufacturing and management, which has achieved remarkable results in reducing costs and increasing efficiency.
The revenue of automotive thermal management pipeline system has increased, raising funds to increase the scale of new energy production capacity. In 2021, the company's automotive heat exchange system pipelines and accessories achieved income of 1.238 billion yuan, + 48.17% compared with the same period last year. Sales of automotive thermal management parts reached 66.7603 million sets during the year, + 15.06% compared with the same period last year, which is less than the income growth rate. This is mainly due to the higher bicycle value of the pipeline system supporting new energy vehicles, contributing to the main revenue increment. It is expected that the proportion of new energy vehicles supporting the company's pipeline system will continue to increase in the future, and the growth rate of business income will increase significantly. In this context, in March 2022, the company changed its fund-raising project and invested part of the Polish base and European R & D center project funds into Anhui (1.5 million sets), Guangdong (1.5 million sets) and Hubei (500000 sets) new energy vehicle thermal management pipeline system projects, and the production capacity continued to expand.
The investment in R & D has increased steadily, and the product matrix continues to be rich. In 2021, the company's R & D expenditure was 102 million yuan, + 12.04% compared with the same period last year, and the R & D expenditure rate was 4.64%. During the year, the company set up Tenglong Research Institute, which co-ordinated business planning and project research and development. at present, some of the R & D products have been verified by customers, and they have completed the installation and commissioning of the production line with mass production capacity, including sensors, electronic water pumps, vehicle wireless charging, etc., among which the car wireless charging has been designated by the customers of the mainframe factory such as Great Wall, Geely and so on. It is expected that in the future, the company's product line will continue to expand and gradually develop in the direction of thermal management integration, and the matching value of bicycles and the level of gross profit margin are expected to increase.
The implementation of employee equity incentives to demonstrate the company's business determination. The employee stock ownership plan is for 140participants, with a share of 1 yuan per share, with an upper limit of 2180 million, with an examination period of 2022-2024. The non-graduate school system (123) is based on 2021 operating income and homing net profit. Assess the company's overall income (three-year target growth rate of 22%, 45%, 65%) and homed net profit (three-year target growth rate of 20%, 40%, 60%); the research institute system (17) assesses the business income of designated projects, life cycle orders and new designated projects. The establishment of a performance evaluation system for companies and individuals is expected to release the growth potential and thicken the company's profits.
Profit forecast and investment rating of new energy vehicles boost the demand for automotive thermal management products, and the value of bicycles is expected to continue to increase under the trend of product line expansion and integration, and is optimistic about the future growth of revenue and earnings. The company is expected to achieve main business income of 27.6,34.2 and 4.18 billion yuan from 2022 to 2024, an increase of 25%, 24% and 22% over the same period last year. Realized net profit of 1.6,2.0 and 250 million yuan, with year-on-year growth rates of 79%, 26% and 23%, corresponding to EPS of 0.46,0.58,0.72 yuan respectively, and the PE valuation of the previous share price was 19,15 and 12 times, respectively. The valuation was reasonable, and the "overweight" rating was given for the first time.
Risks suggest that downstream car sales are not as expected; raw material prices continue to rise; project research and development progress is not as expected; customer expansion is not as expected; market competition tends to be fierce; the epidemic repeatedly affects the stability of the supply chain.