This report is read as follows:
Performance is lower than expected, product differentiation orientation is clear, cemented carbide tools + industrial robots to create the second growth pole.
Main points of investment:
Investment suggestion: it will take time for engineering machinery to reverse its economic situation, lower the EPS forecast for 2022-2023 to 0.49 (- 1.23) / 0.56 (- 1.68) yuan, add 2024 EPS forecast of 0.64 yuan, refer to the industry valuation to give the company 50 times PE in 2022, lower the target price to 24.50 yuan, increase holdings.
The performance was lower than expected, and profitability was under pressure under the sharp rise in raw material prices. In 2021, the company realized revenue of 2.684 billion / + 19% and net profit of 470 million /-9%, which was lower than expected. Gross profit margin 33.76%/-6.9pct, net profit margin 17.5% Maxime 5.4pct 17.87%/-5.3pct, gross profit margin downward is the main reason for the pressure on profitability. When steel prices soared in 2021, the direct material cost was 1.338 billion / + 43%, accounting for 75.62%/+5pct of the total cost. At the same time, the growth rate of expense rate in the three periods is higher than that of revenue, and fee control needs to be strengthened. From a regional point of view, the company's domestic revenue in 2021 is 2.296 billion / + 11.3%, gross profit margin 33.82%/-6.7pct, overseas revenue 337 million / + 107.7%, gross profit margin 25.68%/-7.8pct. 2022Q1 single-quarter revenue of 615 million /-31.2%, return to the home net profit of 72 million /-63.1%, upstream cost restrictions have not been alleviated, downstream demand weakness gradually emerged.
The hydraulic parts are relatively high, and the product differentiation orientation is clear. According to the category, in 2021, the company's hydraulic crushing hammer revenue was 1.112 billion /-13.4%, and the sales volume was 37054 / + 9.8%. With the advance of urbanization, the demand for demolition operations was stable; the revenue of hydraulic parts was 1.521 billion / + 61.4%, and the sales volume was 205367 / + 57.5%. The company actively carried out category expansion to lay the foundation for the future full range of supporting.
Equity incentive demonstrates the strategic intention, cemented carbide tools + industrial robots to create the second growth pole.
The company's equity incentive requirement for 2021 is that the net profit deducted from non-homing in 2023 will increase by 200% over 2019 by 290%. Wholly-owned subsidiaries Ruineng and Actronic are registered in 2020Q4, carrying the company's cemented carbide cutting tools and industrial robot business respectively, creating the second growth pole.
Risk tips: construction machinery boom downward; steel prices continue to rise; single customer dependence is more