CICC releaseresearch reportsay, maintainSkyworth Group(00751) “Outperform the industry” rating, considering the smooth development of new business, the panel cycle downturn and the profit increase, the 2022 and 2023 years will be raisedprofit prediction17%/18% to 1.676/2.051 billion yuan, with a target price of HK$6.94, corresponding to 9.6x/7.8x 2022/23 P/E ratio, a 62% upside compared to the current stock price, which corresponds to 5.9x/4.8 in 2022/2023 multiple price-earnings ratio.
event:The company’s revenue in 2021 is 50.928 billion yuan, a year-on-year increase of 27%;net profit1.634 billion yuan, a year-on-year increase of 13.5%. Corresponding to 2H21 revenue of 28.361 billion yuan, +17.6% year-on-year; 2H21 net profit attributable to the parent was 1.225 billion yuan, +16.8% year-on-year.companyperformanceHigher than the bank’s expectations, mainly due to the company’s participation in financial investment of Anlu Technology,Puran sharesZhenhua New Materials will generate 1 billion yuan of gains from changes in fair value after listing.
The main views of CICC are as follows:
The average TV price has risen significantly, and the Cooca business has grown rapidly:
1) In 2021, the company adopts a strategy of raising prices and improving sales structure to cope with the upward pressure on costs such as panel prices. 2) In 2021, domestic TV revenue is +5.9% year-on-year to 12.949 billion yuan, sales volume is -15.9% year-on-year, corresponding to an average price of +26%, grossinterest rate18.5% (-4.8ppt); overseas TV revenue +15.8% year-on-year to 9.616 billion yuan, sales volume -19.7% year-on-year, grossinterest rate12.4% (+1.2ppt). 3) In 2021, the Internet value-added service revenue of the company’s Cooca system will be 1.234 billion yuan, a year-on-year increase of 16.9%; the Cooca system will cover a total of 118 million terminals, covering various brands.
Photovoltaic business has become the market leader, with unique channel distribution advantages:
1) Skyworth’s rural household distributed photovoltaic business has developed rapidly and has quickly become one of the leaders. High distribution efficiency is a competitive advantage. In the future, the company will expand industrial and commercial photovoltaics. 2) In 2021, the company will generate a photovoltaic business revenue of 4.101 billion yuan, a gross profit margin of 12%, and a segmental profit of 286 million yuan, of which 4Q21 will generate revenue of 1.911 billion yuan (+40.4% compared to 3Q21).
Financial investments bring gains from changes in fair value:
Anlu Technology, which the company participates in financial investment,Puran shares, Zhenhua New Materials will be listed in 2021, generating a fair value change income of 1 billion yuan. Excluding large one-time gains and losses, the adjusted net profit attributable to the parent is 825 million yuan in 2020 (excluding 724 million yuan from the sale of equity); 1.029 billion yuan in 2021, a year-on-year +25%. (Excluding the gain of 1 billion yuan from changes in fair value after the listing of the financial investment company, adding backSkyworth DigitalThe bad debt provision for the accounts receivable of Beijing Guoan Guangshi is 258 million yuan) The bank expects that the quality of business operations will improve in 2022/2023, and the net profit of this caliber will maintain a growth of 20% and 20%.
In 2022, panel prices will be in a downward cycle, and the color TV business will have profitability.From January to February 2022, the national photovoltaic installed capacity is 10.86GW (+234% year-on-year), which continues to be booming. The bank expects that the company’s household photovoltaic business will continue its high growth trend, and industrial and commercial photovoltaics will bring new performance increments.
risk warning:Panel price fluctuation risk; new business development risk; market demand fluctuation risk.
(Article source: Zhitong Financial Network)