Event: the company released three quarterly reports, from January to September 2022, revenue reached 1.953 billion yuan, year-on-year + 2.79%, net profit 334 million yuan, 16.56%, 332 million yuan, 11.55%; single Q3, income 691 million yuan, year-on-year + 8.04%; net profit 91 million yuan,-59.38%, 89 million yuan,-42.01%.
Comments:
Single-quarter income single-digit growth, profit growth is under obvious pressure. Revenue side: consider the potential factors such as the start of the wind farm, the delayed delivery rhythm of the whole machine, and the unreleased quantity of new products in the switching phase of the main bearing products; the profit side: consider the potential factors such as increasing the cost of external mining due to the shortage of self-supply capacity of forgings, as well as product price adjustment. Looking forward to 2023, we believe that the improvement of the company's profitability should pay attention to two aspects: the ① subsidiary Shengjiu forgings' technical transformation, the orderly release of expanding production capacity, and increasing the self-supply ratio of ring forgings, which is expected to significantly reduce the cost end pressure; according to the Mingyang Intelligent Purchasing Framework Agreement previously announced by the company, 1850 sets of main bearings lay the foundation for shipment and optimize the product structure.
Q3 profit margin fluctuates greatly, and the decline of gross profit margin is the main reason for the pressure on profitability: single Q3, the company's overall gross profit margin is 25.03%, year-on-year-12.07pcts, month-on-month-3.03pcts In terms of net interest rate, as the company realized 64 million yuan of fair value change income in the third quarter of 2021, we see that the net profit rate after deducting non-profit is 12.84%, year-on-year-11.09pcts, month-on-month-5.96pcts. The net profit margin is under pressure due to the decline in gross profit margin year-on-year. We believe that the potential factors affecting short-term gross profit margin include: ① product structure: new main bearing products (single-row tapered structure, self-aligning roller structure) have not yet entered the stage of centralized batch shipment. according to the company's report, 3-7MW single-row tapered roller bearings are in the stage of R & D and design and small batch production, and the proportion of high gross margin main bearing revenue decreases in a single quarter. ② cost side: subsidiary Shengjiu forging production capacity release is affected by the early epidemic situation, temporary technical transformation and other factors, ring forging raw material self-supply is reduced, which may lead to short-term cost pressure increase; ③ price end: product price adjustment.
The company's new products and new customers continue to break through, and the domestic alternative leading position in the field of large MW wind power main bearings is stable. New products: the comprehensive company's 2022 mid-term report and Mingyang procurement framework agreement announcement that the company's main bearing structure covers three major categories: three rows of cylinders, double-row cones and single-row cones, in the process of deepening cooperation with Mingyang, it is also expected to further develop new main bearing products suitable for doubly-fed machines. New customers: as a core supplier, the company has participated in the strategic placement of Sany heavy IPO. According to Sany heavy Energy announcement, the two sides will further deepen cooperation on slewing bearings and main bearings and other products, and Xin Qiang main bearing customers are expected to achieve new breakthroughs. At the same time, the company also maintains a cooperative relationship with vision energy, Dongfang Electric, China Shipbuilding, CNR Wind Power and other head machine factories. Overall, the company's large MW sea breeze spindle bearing product reserve, batch verification are in a relatively leading position in the domestic brand, with 7-12MW sea breeze bearing production capacity, and 2023 will take the lead in small batch supply of Mingyang 10MW above sea breeze products, product coverage and continuous expansion, the future is expected to deeply benefit from the future sea breeze installed capacity.
Investment suggestion: under the condition that the future shipping expectation remains unchanged, as the product price adjustment has an impact on the future product average price and gross profit margin, we have adjusted the company's profit forecast. It is estimated that the company's income in 2022-2024 will be 27.00,37.27 and 5.185 billion yuan respectively, the growth rate is 9%, 38% and 39.1% respectively, and the net profit is 5.38,7.86 and 1.117 billion yuan respectively. The growth rates are 4.7%, 46% and 42.1% respectively, and the corresponding PE are 49, 34 and 24 times respectively. Maintain the buy-An investment rating with a 12-month target price of 95.20 yuan, equivalent to the dynamic price-to-earnings ratio of 40X from 2023 to 2024.
Risk tips: downstream wind power industry boom downward, wind power installation is not as expected; capacity release is not as expected; increased competition in the industry affects profitability; core customer technology route switching affects company shipments.