This is a new energy listed company that is driving on the hydrogen fuel cell, lithium-ion battery, solar energy and magnetic materials track at the same time, and the company's customers include: Tesla, Apple and Huawei.
At present, the company has successfully developed solid hydrogen storage materials and has independent intellectual property rights. The product has the advantages of low pressure of hydrogen supply system, convenient replacement of hydrogen storage tank, long mileage, safety and reliability.
The solid-state hydrogen storage technology developed by the company as a 100-watt hydrogen fuel cell power generation system with hydrogen source has been carried out in Jiangsu, Guangdong and other places to carry out demonstration projects in specific regional scenarios.
The company's historical net profit has increased for five consecutive years, and it also reached a record high in 2020 with a performance of 1.014 billion yuan.
In 2021, the company's net profit has continued to grow, and in the third quarter, it has completed a performance of 885 million yuan, and the growth of the company's net profit in 2021 will be a high probability event.
The company's stock, on the other hand, has recently adjusted, with the share price already retracing 33% in 46 days.
Main business and core competitiveness
This company is mainly engaged in the research and development, production and sales of products related to the two major industrial groups of magnetic materials + devices and photovoltaic + lithium batteries.
Among them, the revenue of photovoltaic products accounted for 52.14%, the revenue of magnetic materials accounted for 34.89%, the revenue of lithium batteries accounted for 5.69%, and the revenue of other businesses accounted for 2.61%.
In the field of hydrogen energy, the core research and development direction of Aetna Chuangming Company, in which the company participates, is solid-state hydrogen storage materials and application technologies, which have been developed.
In the photovoltaic industry, the company has an annual output of 600MW silicon wafers, 4GW of cells, 1.5GW of modules production capacity, is the leader of the monocrystalline cell industry.
In the field of lithium batteries, the company has an annual output of 1GW ternary battery production capacity, and is in full production and full sales, the products are mainly used in power tools, electric two-wheelers and sweeping robots.
In addition, the company is currently the only one in China that produces permanent magnet ferrites and soft magnet ferrite products of more than 10,000 tons of enterprises, and the output of permanent magnet materials ranks first in the country.
After reading the basic information of the company, let's analyze the company's performance in detail.
(At the end of the article, there is the name of the company and the code of the stock, please first objectively and correctly understand the basic situation of the company, and then reveal the final answer)
Performance
The following and financial data are derived from the consolidated balance sheet on page 6 and the consolidated income statement on page 10 of the company's third quarter 2021 financial report, without any personal opinion.
The company's net profit performance in 2021 is still outstanding, and the company's performance has increased for three consecutive quarters.
In the first quarter of 2021, the company's net profit was 258 million yuan, an increase of 193% year-on-year.
In the second quarter of 2021, the company's net profit was 546 million yuan, an increase of 59% year-on-year.
In the third quarter of 2021, the company's net profit was 885 million yuan, an increase of 34% year-on-year.
The company's Q3 performance ranked 33rd among the 124 listed companies in the A-share hydrogen energy sector, ranking relatively high, indicating that the company's scale is not small.
Let's take a look at the cash flow of the company and analyze the gold content in the net profit.
In the third quarter of last year, although the company's net profit was only 885 million yuan, the net cash earned by the company due to operating activities was as high as 1.086 billion yuan.
This shows that the company's income statement only shows a net profit of 885 million yuan, while the company's bank account actually has 1.086 billion yuan in cash.
This situation shows that the company's current cash flow is very abundant, which is not only very beneficial to the production and operation of the enterprise, but also improves the efficiency of the use of funds and enhances profitability.
The reason for this is that the industry outlet of new energy has made the company occupy an active position. Customers are actively paying for money, lest they can't buy the products they desperately need.
Finally, let's analyze the earning power of this new energy company and its market position in the sector.
The level of net profit can only explain the size of the company, only by comparing the return on net assets can we judge the earning power of the enterprise, and the return on net assets is the ratio of net profit and shareholders' equity.
In the third quarter of 2020, the management used the investor's 100 yuan to earn only 11.63 yuan of net profit after 9 months, and the return on net assets was 11.63%.
In the third quarter of 2021, the management also used 100 yuan from investors, but after 9 months, it could earn a net profit of 13.65 yuan, and the return on net assets was 13.65%, an increase of 17% year-on-year.
The improvement in the return on net assets indicates that the company's earning power has significantly increased in the third quarter of last year.
The profitability of the company ranked 17th among the 124 listed companies in the A-share hydrogen energy sector, ranking relatively high.
The ranking of profitability is higher than that of net profit, indicating that although the size of this company is not large, its ability to make money is outstanding.
Reasons for profit growth
Let's analyze the reasons for the company's net profit growth, which is also the most important part of this article. Because only the reasons that drive performance growth are sustainable, the company's net profit is likely to rise in the future.
Through DuPont's theoretical analysis, the translator found that the main reason for the company's performance growth in the third quarter of last year was that the time for sales collection was shortened.
The time of sales collection is the account period for the sale of new energy products, which is expressed by the indicator of the number of days of turnover of accounts receivable of the enterprise.
In the third quarter of 2020, the company sold new energy products to Tesla, Apple, and Huawei for a period of 75 days. It now takes only 57 days to receive payment from these companies, and the time to collect money from sales has been shortened by 24%.
The biggest advantage of shortening the sales collection time is that the payment is returned to the company faster, which improves the efficiency of capital use and enhances profitability.
It is worth noting that this is also a major reason for the company's high net cash and abundant cash flow.
There are only two reasons for the shortening of the sales collection time, one is that the management has strengthened the collection of accounts receivable, and the other is that the industry outlet has made the company occupy an active position.
Through the analysis, we know that in 2021, due to the shortened sales collection time of this company, this has led to an increase in the company's net profit in the third quarter.
The reason for the growth of this company's performance is also the acceleration of product sales speed and the amplification of financial leverage, which will not be repeated here.
Inadequacies
In the final part of this article, the translator will take you to find out the shortcomings of this new energy company, so that investors can understand the company more fully.
The translator found that in the third quarter of 2021, the company's biggest problem was that the gross margin on sales declined.
In the third quarter of 2020, the company sold 100 yuan of new energy products, and could earn a gross profit of 24.07 yuan, with a sales gross profit margin of 24.7%.
In the third quarter of 2021, the company also sold 100 yuan of new energy products, but could only earn a gross profit of 19.4 yuan, and the gross profit margin of sales was 19.4%, down 19% year-on-year.
A sharp decline in sales gross margins will reduce the profit margin of the company's new energy products. This will not only reduce operating income, but also affect the growth of the company's net profit.
In the company's income statement, the translator found that in the third quarter of 2021, the company's operating income increased by only 64% year-on-year, while operating costs increased significantly by 74% year-on-year.
This indicates that the company's sales gross margin declined in the third quarter, mainly due to the increase in the price of raw materials for the product. And this is a natural disaster and a man-made disaster, and has nothing to do with the production and operation of the enterprise.
The company's sales gross margin in the third quarter ranked 73rd among the 124 listed companies in the A-share hydrogen energy sector, ranking lower.
This company is Hengdian Dongci Co., Ltd., and the stock code 002056.
Please note: For companies with good fundamentals, stocks do not necessarily rise. But those stocks that can continue to rise sharply, the fundamentals of the company must be very good.
This article neither recommends the stock of Hengdian Dongci, nor does it say how good Hengdian Dongci Company is, but refines and translates the company's financial reports.