Event
Performance forecast: double net profit in 2021
On January 20, 2022, long Magnetic Technology issued an annual report and announced that the company expects to realize a net profit of 130 million yuan to 140 million yuan belonging to shareholders of listed companies in 2021, an increase of 90.57%, 105.23% over the same period last year, and 68 million yuan in the same period last year. It is estimated that the net profit after deducting non-recurring profits and losses is 121 million yuan to 133 million yuan, an increase of 130.70%, 154.63% over the same period last year, and 52 million yuan in the same period last year. During the reporting period, the company's non-recurrent profit and loss is expected to be 7 million yuan to 9.5 million yuan, mainly for government subsidies, compared with 15.98 million yuan in the same period last year.
Brief comment
The fourth quarter results are in line with expectations, and the Vietnamese subsidiary has resumed production.
Based on the data of the first three quarters and the central numerical calculation of the annual performance forecast, the net profit attributed to shareholders of listed companies in the fourth quarter was about 31 million yuan, down 5.5% from the same period last year and 24.7% from the previous quarter; net profit after deducting non-recurring profits and losses was 30 million yuan, up 45.6% from the same period last year, down 21.9% from the previous year. The quarter-on-quarter decline was mainly due to the suspension of production by Vietnamese subsidiaries: wholly owned subsidiary Vietnam Dragon Magnetic stopped production on July 30, 2021 due to local epidemic prevention requirements, received approval to resume production on December 14, and gradually resumed production. Up to now, factory production has returned to normal.
The scale advantage of permanent magnet production capacity continues to expand, and the company will take advantage of the wind.
The company is a scarce manufacturer of high-end permanent magnet materials, which has formed a production capacity of 33,000 tons / year of high-performance permanent magnet ferrites. Starting from 2022, it plans to increase the production capacity of permanent magnet ferrite tiles by 10,000 tons / year. By 2024, the production capacity will reach 60,000 tons / year. China's middle and low-end ferrite production capacity is sufficient, but high-end product capacity is scarce, long Magnetic Technology has technical advantages, downstream certification advantages, customer channel stickiness, scale advantages continue to expand, the company is expected to take advantage of the wind.
Permanent magnet products are positioned at the high end, and the gross profit margin is higher than that of the same
The company already has a relatively high-end level in production technology and customer certification, with mature market channels and accurate market positioning, the "Dragon Magnetic" brand has been widely recognized in domestic and foreign markets, and many well-known companies at home and abroad have become stable customers, such as France VALEO (Valeo), Japan MITSUBA (Sanye), Germany BROSE (Bosch), BOSCH (Bosch), South Korea LG, Samsung and so on. And mostly direct sales.
In the process of the growth of the demand for micromotors, the demand for high-end permanent magnet ferrite materials will also increase greatly. The gross margin of the company's high-end permanent magnet products is stable at more than 35%, significantly higher than the level of the same industry (10-25%).
Layout of soft magnetic and new energy components and other projects, strong growth company permanent magnet basic disk steady growth at the same time, but also a new layout of 6000t high-performance soft magnetic materials, has formed a metal magnetic powder core production capacity of 3000 tons / year, 2022 will reach 5000 tons, soft magnetic ferrite design capacity of 6000 tons / year, currently under construction, plans to put into production in the third quarter of 2022. The company plans to invest 700 million yuan to build high-frequency magnetic device projects to build the whole industry chain layout of soft magnetic materials. In the future, with the rapid development of photovoltaic, new energy vehicles, energy storage and other fields, the demand for soft magnetic and inductors will increase greatly, and the company's profitability will increase year by year with the progress of project production, with strong growth.
Profit forecast and investment advice
The company's 2021-2023 net profit is expected to be 134 million, 176 million and 228 million yuan, an increase of 96.9%, 31.3% and 29.1%, corresponding to the current estimated PE of 32.7x, 24.9x and 19.3x, respectively. The growth rate of micro-special motors and China's new energy industry is high, and the demand for high-performance permanent magnet ferrites, soft magnets, inductors and other components will increase greatly. As the first high-end permanent magnet material manufacturer to master the advantages of technology and customer certification, the company will benefit from the growth of high-end permanent magnet industry and enter into the field of soft magnetic and new energy components. The company is currently rich in project reserves, with high growth, given a "buy" rating.
Risk hint
The construction progress of the project is not as expected, and the epidemic repeatedly affects the demand.
