Event: the company announced the announcement of performance pre-loss in mid-2022. 2022H1 expects to achieve a net profit of-23.07 million yuan to-18.87 million yuan, a loss compared with the same period last year, and to deduct the non-return net profit of-51.82 million yuan to-42.4 million yuan. The comments are as follows:
2022H1 company performance pre-loss, a number of factors lead to short-term performance pressure. Revenue side: according to the announcement, 2022H1's revenue is expected to decline by 7% Mel 8% compared with the same period last year, and it is estimated that 2022Q2's revenue is about 330 million to 340 million yuan, down about 10.8% Mel from the same period last year. The main reasons for the decline in revenue are: (1) repeated epidemic situations during the reporting period, the company's logistics and transportation is not smooth, on the other hand, the production end of major customers such as the Great Wall is also limited, resulting in the current sales are not up to expectations; (2) the company makes a strategic collection of its own home appliance parts business. Cost side: (1) the company increases the layout of the new energy auto parts business, the R & D investment continues to increase during the reporting period, and capacity expansion leads to an increase in capital demand, resulting in an increase in loan interest costs. (2) during the reporting period, the price of raw materials is still high and the price of natural gas is rising, which leads to a continuous rise in the management costs of subsidiaries during the construction period. We judge that as the epidemic alleviates, logistics transportation and terminal demand recover, and the company's capacity release drives the release of new orders, profitability will improve.
In the medium and long term, the growth logic of the two core businesses of transmission and new energy remains unchanged, and the integrated die-casting business opens a new space for development. (1) Transmission business: DCT valve plate is the company's advantage product, in addition to supporting independent car companies mainly through BergWarner, the company also got direct supply orders from BYD, Great Wall and other customers.
Benefiting from the increase in independent DCT penetration, the company's transmission business will maintain high growth. (2) New energy business: compared with domestic competitors, the company enters the new energy field earlier and has stronger technology research and development strength.
The electric motor and electric drive shell business is the traditional advantage project of the company's new energy business. In 2021, the company won the order of battery components such as battery end plate and battery tray, expanding the new energy business to the battery field.
With the release of production capacity, in-hand orders will be quickly released. (3) Integrated die casting business: the company has technical reserves in large new energy aluminum castings and earlier purchased large tonnage die casting machines for layout. At present, large die casting machines are mainly used for "all in one" components, battery components and car body components related business. According to the announcement information, the company's 5000T die casting machine has been put into use and mass production, 6000T and 8000T die casting machine is expected to arrive in the second half of the year.
Profit forecast and investment rating: affected by the epidemic, the company's performance is under short-term pressure. in the medium and long term, we are still optimistic about the market competitiveness and high growth of the company's core business such as new energy and transmission parts. Taking into account the impact of the lower-than-expected performance in the first half of the year and the recurrence of the epidemic situation, we adjusted the company's net profit from 2022 to 2024 to be 1.25,2.56 and 412 million yuan respectively (original value 2.45,2.65 and 428 million yuan), and corresponding EPS were 0.62,1.27,2.05 yuan (original value 0.72,1.31,2.12 yuan). The closing price on July 18, 2022 corresponds to the PE value of 38, 19 and 12 times in 2022-2024, respectively. Maintain the "highly recommended" rating.
Risk tips: passenger car sales are not as expected; upstream raw material prices are rising; lack of core recovery is not as expected; new capacity construction progress is not as expected.