Company Overview: A high-end logistics equipment manufacturer in China that combines software and hardware. The company is a full-process intelligent logistics system solution provider. The core product is an intelligent warehousing logistics automation system. The company is essentially a software developer+hardware equipment manufacturer+system solution provider. The core products are all self-developed and produced, with a self-developed self-production rate of 80%, so it has significant cost advantages in the industry. The company's gross margin in 2021 was 35%, net interest was 13%, and profitability was higher than most competitors in the industry. The company's business scale ushered in a period of rapid growth, with revenue of 604 million yuan in 2021, a year-on-year growth rate of 34%, and revenue of 118 million yuan in Q1 2022, a year-on-year growth rate of 123%. As the standard of the company's products continues to improve and the gigafactory is completed and put into operation, the company's order volume is expected to increase further, and the scale of revenue continues to rise.
Demand for intelligent logistics and warehousing is strong, and the development of the industry is on the fast track. Intelligent logistics equipment is a prerequisite for achieving a smart supply chain. The application scenarios are diverse and the market space is broad. According to CIC insight consulting data, the market size of China's intelligent logistics equipment industry was about 42 billion yuan in 2019. It is expected to reach 106.8 billion yuan in 2024, with an average annual compound growth rate of 20.5% in 2019-2024. The prosperity and development of the logistics and warehousing industry, rising labor costs, the manufacturing industry's pursuit of scale effects, and the continuous expansion of downstream application scenarios are the main driving forces behind the growth in demand for intelligent logistics equipment. Under the trend of systematization, customization and refinement, integrated warehousing and logistics equipment suppliers are highly attractive to enterprise customers.
Smart logistics system manufacturers have taken off across the board due to accumulation and scarce development. The company's products are mainly three logistics automation systems: pallet level, bin level, and specific selection. The software products in the system are highly integrated with the hardware, and are basically developed and manufactured by the company itself. The company's development has always been based on R&D as its core driving force, and has significant technical advantages in the field of logistics equipment. Advanced AI intelligent algorithms have become the company's core technical advantage. The digital twin system has been applied to many of the company's business projects, greatly improving operational efficiency. The company focuses on high-end markets and leading customers. Downstream customers cover a wide range of fields, which is a prominent feature of the company. The company's order volume reached a record high in 2021, with new orders over 1 billion yuan for the first time in the year. Of these, orders from Ningde Times totaled 215 million yuan, individual orders from the world's leading ICT solution providers amounted to 157 million yuan, and Muyuan Co., Ltd.'s orders totaled 143 million yuan.
Profit forecasting, valuation and rating: The company is deeply involved in the intelligent logistics industry, focusing on expanding the intelligent logistics warehousing automation system business, and the order volume is gradually increasing. With the advancement of R&D and the improvement of product competitiveness, combined with the growing trend of demand for intelligent logistics equipment in China, we predict that the company's revenue for 2022-2024 will be 899, 1202 and 1,592 billion yuan respectively. The net profit of the mother will be 127, 170, and 223 million yuan respectively, and the corresponding EPS will be 174, 2.35, and 3.08 yuan. Referring to the relative valuation and absolute valuation results, we gave the company a target price of 40 yuan (corresponding to PE 23x in '22), covering the “buy” rating for the first time.
Risk warning: macro-environmental risk; risk of unsustainable customer orders; risk of bad debts on accounts receivable and contract assets; risk of sub-IPO stock price fluctuations