Event 1: the company publishes its 2020 annual report. In 2020, the company achieved revenue of 2.256 billion, year-on-year + 56.38%, return net profit of 516 million, year-on-year + 50.82%, deducting non-return net profit of 508 million, year-on-year + 52.55%. The gross profit margin of sales is 40.66% precinct yoymure 2.18pct; the net profit margin of sales is 22.88% fuyoymuri 0.84pct.
The reduction of gross profit margin is mainly due to the company's implementation of the new revenue criteria in 2020, adjusting the freight of the original sales expenses to operating costs, the relevant amount is 30 million yuan, and the price fluctuation of the company's raw materials and steel, and the pressure on cost control increases. If excluding the impact of changes in income criteria, the company's 2020 gross profit margin is 41.98%.
In 2020, the company's sales / management / R & D / financial expense rates were 4.09%, 3.84%, 4.67%, 0.47%, respectively, compared with the same period last year-1.75pct/-0.7pct/+0.95pct/-0.61pct.
In 2020, the company realized net cash flow of operating activities of 335 million, year-on-year + 73.12%; of which, 2020Q4 achieved revenue of 648 million, year-on-year + 72.92%; return net profit of 95 million, year-on-year + 12.74%; deduction of non-return net profit of 89 million, year-on-year + 7.53%; sales gross profit 33.17%;
Event 2: the company releases its quarterly report for 2021. 2021Q1 achieved revenue of 895 million, year-on-year + 134.19%, home net profit of 196 million, year-on-year net profit of 127.88%, deduction of non-return net profit of 195 million, year-on-year + 125.5%, gross profit of 36.83% yoymuri 3.62pct, net profit of 21.89% yoymai 0.61pct.
During the period of the company, the expense rate is better controlled. The sales / management / R & D / financial expense rates of 2021Q1 are 3.48% 2.46% and 3.48% 0.32%, respectively, compared with the same period last year-1.67pct/-1.07pct/1.24pct/+0.07pct.
Two-wheel drive of crushing hammer and hydraulic parts, capacity expansion ensures future growth: the company's crushing hammer revenue in 2020 is 1.284 billion, year-on-year + 26%, gross profit 44.61%, year-on-year-2.23pct, hydraulic parts income 942 million, year-on-year + 130.60%, gross margin 33.64%, year-on-year + 2.64pct. Domestic crushing hammer has the property of low permeability and high growth. At present, the domestic hammer ratio is 20% and 25%, compared with 30% and 40% in developed countries, there is still some room for improvement. Hydraulic parts break through Sany, Lingong, Shanzhong and other mainstream customers. In recent years, the company has raised 700 million yuan to expand the production capacity of crushing hammer and increase the construction of hydraulic parts through non-public offerings, which is expected to reach production in 2023. At that time, the production capacity of 80,000 hydraulic motors per year, 50,000 hydraulic main pumps per year and 20,000 hydraulic crushing hammers per year will be added to fully benefit from the high prosperity of construction machinery.
Profit forecast and investment rating: taking into account the company's fundamentals and the 2020 annual report data, we adjust the profit forecast and estimate that the company's return net profit from 2021 to 2023 is 720 million (previous value 820 million), 910 million (previous value 1.08 billion) and 1.1 billion, respectively, corresponding to 50.2 PE 39.8x32.9X, maintaining the buy rating.
Risk tips: the expansion of new products is not as expected; the price of raw materials changes; the prosperity of the excavator industry changes.