The performance is basically in line with expectations, continue to be optimistic about the improvement of demand in the industrial chain and domestic substitution, and maintain the "buy"
In 2020, the company realized revenue of 677 million yuan / yoy+19.6%, mainly from China V diesel engine, while China VI gasoline engine and diesel engine were supplied in batches; the net profit of 125 million yuan / yoy+21.3%, was basically in line with our previous forecast (132 million yuan). The company's heavy firewood customer expansion to achieve a breakthrough and obtain certification announcement to verify the company's technical strength; continuous R & D investment is expected to achieve cost reduction and efficiency. We adjust the 21-22 year return net profit forecast to 228 million yuan, introduce 23 years return net profit 548 million yuan, give 21-year 40x target Pmax E, target price 114yuan, maintain "buy".
In 2020, the main products are GuoV diesel engines, and both China VI gasoline engines and diesel engines are supplied in batches. The company achieved revenue of 677 million yuan / yoy+19.6%, in 2020, of which 1) VI diesel engine SCR revenue was 475 million yuan, which was the same as the same period last year; 2) China VI diesel engine product income was 32 million yuan, realizing batch supply and verifying the company's technical strength; 3) China VI gasoline engine product revenue was 98 million yuan, a year-on-year increase of nearly 3 times 4) the income of DPF products is 0.38 billion yuan / yoy-13.7%. The sales revenue of the top five customers in the first 20 years accounted for 79%, down 8pct from the same period last year, and the income structure was more balanced; the comprehensive gross profit margin was 36%, which was the same as the same period last year; the expense rate was from + 0.6pct to 16.3% compared with the same period last year, and the sales / management / R & D / financial expense rate was + 0.8/+0.6/-0.4/-0.4pct, respectively, affected by the increase in installation and after-sales service fees and the growth of management personnel.
China's VI technology reserve and customer expansion have achieved fruitful results, waiting for the standard switch to enter the cash period in 2020, the company has achieved remarkable results in market development, with a cumulative total of 50 designated development projects throughout the year; heavy firewood customers have achieved breakthroughs and certification announcements, and ship post-processing has achieved supporting supply to leading customers such as China Shipping Anchai / Hechai heavy Industry / Luochai heavy Machinery. The national VI standard for motor vehicles will be fully implemented in July 21, promoting the rise in the volume and price of VI post-processing. We estimate that the market space in 21 years is more than 1000 billion yuan / yoy+12%, is leading in market development and technology research and development, and is expected to achieve rapid growth. In addition, the off-road IV standard will be implemented in December 22, and the company has carried out product pre-research and calibration tests with a number of customers in the off-road field, which is expected to contribute new growth points in the future.
Maintain a "buy" rating with a target price of 114 yuan per share
As the motor vehicle national six emission standards enter the implementation period, the company's main products are expected to meet the volume and price rise. We estimate that the net profit of homing in 21-22 years is 375 million yuan (the previous value is 226,374 million yuan), and the net profit of 23 years after introduction is 548 million yuan, corresponding to the EPS of 2.85 Universe 4.69 Plus 6.86 yuan. With reference to comparable company's consensus expectation of Wind E average 38 times in 2021, taking into account the rapid growth of market capacity and company performance growth in exhaust gas post-treatment (2021-2023 CAGR 64%), a certain valuation premium is given to the company in 2021 40 times Pmax E, corresponding to the target price of RMB 114 (the previous value is RMB 112.91), maintaining the "buy" rating.
Risk hints: the risk that the implementation of industry policy is lower than expected, the risk of declining prosperity in the automobile industry, the risk that the progress of the company's product certification is lower than expected, and the risk of fluctuation in raw material prices.