What happened: the company recently released its 2021 annual report and 2022 quarterly report. In 2021, the operating income was 1.615 billion yuan, + 16.53% compared with the same period last year, and the net profit was 122 million yuan, + 0.76% compared with the same period last year. 2022Q1 realized operating income of 407 million yuan,-3.72% of the same period last year, and net profit of 18 million yuan,-62.54% of the same period last year.
Year-on-year revenue growth in 2021, short-term pressure on 2022Q1 revenue, transmission and new energy business continues to increase. The company achieved year-on-year revenue growth in 2021, mainly due to the advance layout of the company in the field of new energy automobile parts and the improvement of market penetration of transmission parts business. The short-term pressure on the company's 2022Q1 revenue was mainly due to the lower-than-expected sales of its big customer Great Wall Motor due to the shortage of Bosch ESP chips, as well as the repeated epidemic situation that blocked the company's logistics and transportation. In 2021, the revenue of the company's core business, new energy auto parts and auto transmission parts, increased by 43.3% and 36.1% respectively over the same period last year, accounting for 35.0% and 20.0% respectively, an increase of 5.0% and 3.7% over 2020, and the product structure continued to be optimized.
After considering that freight is included in operating costs in the new accounting standards, the company's gross profit margin is under short-term pressure affected by many factors, the rate of sales and management expenses is basically the same, and the rate of R & D expenses is increased. The company has included freight in operating costs since 2021. In order to facilitate the analysis, according to the data announced by the company, we subtract the corresponding transportation costs from the sales and management expenses in 2020, while the operating costs take into account the transportation costs. The company's gross profit margin in 2021 was 20.8%, a decrease of 2.67 pcts compared with 2020, mainly affected by higher prices of raw materials and rising international sea freight. We believe that as the price adjustment mechanism between the company and customers continues to advance and the cost is transmitted downstream, the gross profit margin is expected to increase. The company's sales expense rate and management expense rate in 2021 were 3.63% and 6.06% respectively, an increase of 0.11 pcts and 0.08 pcts over the same period last year, which was basically the same. The company's R & D expenditure rates for 2021 and 2022Q1 were 7.72% and 10.59% respectively, an increase of 1.76pcts and 3.89 pcts over the same period last year, mainly due to the increase in R & D investment in new projects.
The medium-and long-term growth logic of the two core businesses of transmission and new energy remains unchanged, and the integrated die-casting business opens up a new space for development. (1) Transmission business: DCT valve plate is the company's advantage product, in addition to supporting independent car companies mainly through BergWarner, the company also got direct supply orders from BYD, Great Wall and other customers. Benefiting from the increase in independent DCT penetration, the company's transmission business will maintain high growth. (2) New energy business:
The company entered the field of new energy earlier and has strong technical research and development strength. At present, the company has achieved full coverage of the three power system, with the release of production capacity, in-hand orders will be quickly expanded. (3) Integrated die casting business:
The company has technical reserves in large new energy aluminum castings, and earlier purchased large tonnage die casting machines for layout. At present, large die casting machines are mainly used for "multi-in-one" components, battery components and car body components related business.
According to the announcement information, the company's 5000T die casting machines have been put into use and mass production, 6000T and 8000T die casting machines will also come to the factory one after another, and it is expected to complete the installation and commissioning of seven large die casting machines above 3000T by the end of 2022.
Profit forecast and investment rating: we are optimistic about the company's market competitiveness and high growth in new energy, transmission parts and other core business. Taking into account the impact of raw material prices and freight increases, we adjust the company's 2022-2023 net profit of 1.45,265 million yuan (original value 2.01,315 million yuan), corresponding to EPS of 0.72,1.31 yuan (original value 1.00,1.57 yuan). It is estimated that the net profit of 2024 will be 428 million yuan, corresponding to EPS of 2.12 yuan. The closing price on May 5, 2022 corresponds to the PE value of 25, 14 and 8 times for 2022-2024, respectively. Maintain the "highly recommended" rating.