Events:
On March 31, 2021, the company issued a forecast for the first quarter of 2021. It is expected to achieve a net profit of 79.2462 million yuan to 94.4859 million yuan in the first quarter of 2021, compared with 30.4793 million yuan in the same period last year, an increase of 160.0% and 210.00% over the same period last year. Basic earnings per share of 0.19 yuan per share to 0.22 yuan per share, compared with 0.07 yuan per share in the same period last year.
Event comments:
The performance growth in the first quarter exceeded expectations. Liangwang Company, which produces and sells traditional power tool accessories, is expected to achieve a net profit of 79.2462 million yuan to 94.4859 million yuan in the first quarter of 2021, an increase of 160.0% to 210.00% over the same period last year, showing an accelerated growth trend as a whole.
The substantial increase compared with the first quarter of last year is mainly due to: 1) the power tools industry maintains a high demeanor and the market demand is strong; 2) the power tool accessories business revolves around the continuous transformation of electronic accessories, fully enjoy the drainage effect brought by overlapping customers in the categories of electronic switches, controllers and battery package accessories. 3) the core business of the company is booming in production and sales of power tools accessories products, giving full play to the company's advantages in quality, technology, brand and scale, actively developing new products, opening up the market, grabbing orders, and greatly increasing its market share.
In the leading industry in the field of power tool accessories, the traditional power tool business of core suppliers of a number of leading enterprises is mainly focused on drilling chucks, structural parts and other mechanical parts.
The company has always carried out continuous R & D and automation transformation around new products and new processes, expanding from machined accessories to electronic accessories such as power tool controllers, electronic switches, battery packs and other electronic accessories. Electronic accessories products account for more than 60% of the profits this year.
With the traditional power tools business as the cornerstone, looking forward to the full outbreak of power station exchange business, the company and Wuhan Lulai Energy Co., Ltd. jointly funded the establishment of Kunshan Swop in 2017, which officially laid out the electric vehicle power station exchange business. and become the exclusive supplier of power station exchange technology for Lulai. In 2020, the capital increase of Wuhan Xuneng battery won 8.88% of the equity, locking the downstream demand.
It is planned to add 320 new power stations in 2021, and the construction of the replacement power stations will enter a period of accelerated expansion.
Investment rating and valuation
We expect the company to achieve net profit of 2.53,3.34 and 432 million respectively from 2020 to 2022, corresponding to PE of 17.77,13.47,10.41x respectively, maintaining the "recommended" rating.
Risk hint
The COVID-19 epidemic led to a sustained downturn in the global economy, the production and sales of power tools and new energy vehicles fell short of expectations, product price fluctuations led to lower-than-expected profits, the risk of technological route change, and so on.
