Steady growth will be achieved in 2021, and price increases in the upstream supply chain will affect gross profit margins. In 2021, the company realized operating income of 1.417 billion yuan, + 22.2% year-on-year, and net profit of 154 million yuan, + 28.9% over the same period last year, achieving steady growth as a whole.
From a business point of view, the company's intelligent data terminal business achieved revenue of 650 million yuan, + 17% year-on-year; intelligent payment terminal business revenue of 120 million yuan, + 17% year-on-year; revenue of special printer business of 480 million yuan, + 26% year-on-year; revenue of software, development and services was 24 million yuan, + 50% year-on-year; revenue of other businesses was 140 million yuan, + 35% year-on-year.
Affected by the increase in the price of upstream raw materials, the company's gross profit margin in 2021 was-4.7pct to 29.4% compared with the same period last year. However, due to lower R & D and sales costs and lower expense rates (year-on-year-2.8pct), the overall net interest rate remained stable, with net interest rates ranging from + 0.5pct to 10.8 per cent year-on-year.
The epidemic affects the performance of 22Q1. In March, due to the control of the epidemic in Shenzhen, the company and some upstream and downstream factories stopped production periodically, and the delivery time of raw materials and the export cycle of products were extended, which affected the delivery and implementation progress of some of the company's customers' projects to varying degrees. Affected by this, 22Q1's operating income is-1.8% to 297 million yuan compared with the same period last year. While the rise in raw material prices and transportation prices still have a certain impact on the company's gross profit margin (year-3.1pct), and equity incentive amortization expenses, exchange losses and R & D expenses increase lead to the expense rate year-on-year + 2.7pct, affecting profitability. Subject to this, the net profit of 22Q1 is 29 million yuan,-33.1% year-on-year, and the net interest rate is-4.6pct to 9.7% compared with the same period last year.
Customer demand is strong, and there are plenty of orders on hand. According to the company announcement, the company's customer demand is strong, on-hand orders are sufficient. 22Q1 company newly signed orders of about 496 million yuan, + 43% compared with the same period last year; as of 22Q1, the company had outstanding orders of about 396 million yuan, an increase of about 199% over the same period last year. With the acceleration of the application of the Internet of things and the industrial Internet, logistics, retail, medical, manufacturing and other industries continue to transform to digital and intelligent, the company's smart terminals, intelligent POS, special printers, intelligent automation equipment and other products are in strong demand, and the industry boom trend remains unchanged. In order to cope with the impact of the epidemic, the company also increased its inventory in the first quarter, with a net increase of 55 million yuan to 360 million yuan compared with the previous quarter, ensuring the pace of supply.
Share buybacks demonstrate confidence in growth. On April 29, the company issued a buyback report, intending to use its own funds to buy back shares for the implementation of employee stock ownership plans or equity incentives. The repurchase capital is not less than 40 million yuan and not more than 80 million yuan, the repurchase price is not higher than 23.8 yuan per share, and the corresponding number of repurchased shares is about 168,000-3.36 million shares. The company buyback shares are used as incentives to demonstrate confidence in growth.
Risk tips: downstream market demand is lower than expected; the epidemic repeatedly affects production and downstream market demand.
Investment advice: downgrade earnings forecasts and maintain a "buy" rating.
Considering the influence of the epidemic and other external factors, the profit forecast is lowered. It is estimated that in 22-23, the company's operating income will be reduced from 2111.6 billion yuan to 192.4 billion yuan, and the net profit of returning home will be reduced from 29,390 million yuan to 22,000,000 yuan respectively, and the corresponding PE will be 13 times higher than 19,000,000 yuan. The company has sufficient orders on hand, strengthen stock preparation to ensure the pace of follow-up supply, with the easing of cost pressure, the follow-up performance is more flexible, and the share buyback is used as an incentive to show growth confidence and maintain the "buy" rating.