Main points of investment
Next Wednesday (August 9), there will be an inquiry by Zhongchen Technology, a listed company on the main board.
Zhongchen Technology (603275): the company is a high-tech enterprise specializing in product research and development, production, sales and service in the field of industrial automation, the main products are low-voltage frequency converter and servo system. From 2020 to 2022, the company achieved operating income of 626 million yuan / 620 million yuan / 536 million yuan, respectively, and its YOY was 39.14% and 13.63%, respectively. The annual compound growth rate of operating income for three years was 6.01%. The net profit of returning to the mother is 181 million yuan / 197 million yuan / 150 million yuan, and the YOY is 49.62%, 8.76%, 23.60%, respectively, and the annual compound growth rate of the net profit of three years is 7.52%. During the latest reporting period, the company's operating income from January to June 2023 was 306 million yuan, up 15.06% from the same period last year, and the net profit was 94 million yuan, up 32.55% from the same period last year. According to the preliminary forecast, the company is expected to achieve a net profit of 149 million yuan to 173 million yuan from January to September 2023, an increase of 29.92% to 50.85% over the same period last year.
Investment highlights: 1. The company occupies a place in the domestic substitution process of low-voltage frequency converter by virtue of cost-effective products. With the development of China's industrial automation industry has made great progress, taking advantage of domestic instead of Dongfeng, domestic low-frequency transformer enterprises continue to seize the share of overseas, especially Japanese manufacturers. According to the China Industrial Control Network, the localization rate of the local low-voltage frequency converter market has increased from 33.0% in 2018 to 38.4% in 2022. Since 2020, the company has entered the field of industrial automation and focused its R & D investment on the product type of low-voltage frequency converter. from 2006 to 2022, the revenue of low-voltage converter accounted for more than 97% of the main business. Since its inception, the company has implemented the cost-oriented product management strategy, continuously through the optimization of product structure, the introduction of economic products, "factory matching, industry focus" business strategy flexible pricing, lean production, flat management and other ways to provide customers with cost-effective products, gradually have a place in the domestic mortgage frequency converter market, with a market share of 1.85% in 2022 It ranks among the best among domestic brands. 2. The rich experience of the management empowers the company to open up new areas, and the production capacity is currently under active preparation. Company founder Zhang Jianjun has more than 20 years of low-voltage frequency converter industry experience, while some of the company's senior executives from Emerson, experienced, is expected to support the company to explore new areas. According to the company's prospectus, the company is accelerating the development of new products and new areas, such as US880 servo system, programmable display and control integrated controller of injection molding machine, etc., which has formed sales in the first half of 2023; and fund-raising projects put forward that the company is expected to expand in the future to elevators and construction lifts, lifting, hydraulic servo, textile, chemical fiber, iron and steel and other industries with large demand for products. As of the first half of 2023, the capacity utilization rate has been relatively high (108.55%). In order to cooperate with the company's expansion in new business areas and further expand the company's business, the company is actively preparing new capacity. Projects under construction increased by 77.88 million yuan in 2022 and 58.94 million yuan to 139 million yuan in the first half of 2023, including the expansion of production auxiliary housing by Zhongchen Science and Technology, the construction of a new factory building in Zhongchen and the construction of Zhongchen Science and Technology R & D and production base. The acceleration of production capacity construction is expected to ensure the development of the company's business.
Comparison of listed companies in the same industry: comprehensively considering business and product types, Huichuan Technology, Blue Ocean Huateng, Inviton, Weichuang Electric and Sine Electric are selected as the comparable listed companies of Zhongchen Technology; from the above comparable companies, the average income in 2022 is 5.761 billion yuan, the sales gross profit margin is 33.96%, and the comparable PE-TTM (arithmetic average) is 36.44X. In comparison, the revenue scale of the company is lower than the industry average, and the gross profit margin is higher than the industry average.
Risk hint: companies that have started the inquiry process still have the possibility of not being listed due to special reasons, the company content is mainly based on prospectuses and other public materials, and the selection of listed companies in the same industry is not accurate. Risk, content data interception may have interpretation deviation and so on. The specific risks of listed companies are shown in the text.