Event
Fei Rongda issued an announcement: the company's 2022H1 realized income of about 1.7 billion yuan / yoy+43%, return to its mother's net profit and loss of about 37 million yuan.
Main points of investment
Revenue performance is eye-catching, profit is expected to meet the medium-and long-term upward inflection point company 2022Q2 income 970 million yuan / yoy+67%/QoQ+29%, return mother net profit loss of 19 million yuan, deducting non-net profit loss of 23 million yuan, narrowed compared with 2022Q1 loss of 46 million yuan. In terms of profitability, the company's 2022Q2 gross profit margin was 13.8%, up 1.8pct from the previous month and down 2.9pct from the same period last year. The labor and depreciation costs of the company's Jiangsu Park increased by 92 million yuan in the first half of the year, some new projects are still in the stage of research and development, trial production and proofing, and the production capacity has not been fully released, which has a certain impact on gross profit margin and profit. The company maintains high-intensity R & D investment, with R & D expenditure reaching 128 million yuan in the first half of 2022, accounting for 7.4% of income. In terms of cash flow, the net cash flow of the company's 2022Q2 operating activities is + 58 million yuan, maintaining a good performance.
On the whole, the company's forward-looking transformation, plus the development of new energy business, achieved remarkable results, and the revenue side maintained rapid growth. The profit side expects the company to improve gradually in the quarter, on the one hand, from the relief of cost pressure caused by the downward price of raw materials, and on the other hand from the dilution of unit cost brought by the scale effect of the company.
With rich new energy products and high quality customers, the company is expected to have a high growth rate of about 1.7 billion yuan in 2022H1 revenue, of which nearly 400 million yuan / yoy+229%, accounts for about 22% of the new energy business, 32% of the consumer electronics category and 30% of the communications sector. The company's new energy products include liquid cooling plate, composite cover plate, battery end plate, connecting piece, energy storage system components and so on. In the field of electric vehicles, the company's customers include Guangzhou Automobile, BAIC, Ningde, Funeng, etc., photovoltaic and energy storage customers include Sunshine Power, Guriwatt, Goodway, Francois and Ningde era.
The company signed strategic cooperation with Ningde Times at the end of 2021, with a contract order of 3.6 billion yuan to provide Ningde era with liquid cooling plates, composite cover plates and other products. The company's new energy business product line is rich, customer quality, the future revenue end is expected to continue to grow at a high speed.
Improve the long-term incentive mechanism and actively increase production capacity to ensure long-term growth companies in order to further establish and improve the company's long-term incentive mechanism to attract and retain outstanding talents, the company implemented an equity incentive plan (grant price of 10.9 yuan per share) on November 26, 2022, and granted a reservation to incentive targets (award price of 12.48 yuan per share) on February 11, 2022, and increased related fees of 27 million yuan in the first half of 2022. The company actively increased the layout of production capacity, with capital expenditure of 351 million yuan in the first half of 2022, maintaining a high level of capital expenditure. The additional issue of the company has been approved by the CSRC and intends to raise 1 billion yuan, of which 800 million yuan will be used to expand the production capacity of products such as overweight energy storage components and liquid-cooled panels. The project is expected to increase revenue by about 2.3 billion yuan and net profit by about 200 million yuan.
The company actively straightens out governance, retains talents through equity incentives, and actively raises funds to expand production to ensure the company's long-term growth.
Profit forecast
Based on the principle of prudence, the impact of this additional offering on performance and equity will not be considered for the time being.
It is estimated that the net profit of 2022Universe 2023Universe in 2024 will be 0.5Universe 2.1 / 380 million yuan, eps is 0.09Universe 0.42, and the corresponding PE is 177-40-23 times respectively. The company will increase the layout of the new energy industry, optimize the governance structure, long-term company growth is expected, and maintain the company's "buy" rating.
Risk hint
Policy fluctuation risk; downstream demand is lower than expected; product price is lower than expected; competition pattern deterioration risk; capacity expansion and digestion is not as expected; IPO progress is not as expected.