Financial Associated Press (Xiangtan, reporter Huang Lu) news, "the company's 19 years proposed in the three years of the main business doubled, the benefits doubled and to achieve a comprehensive turnaround of the goal, last year has been completed a year ahead of schedule, all business sectors to achieve profitability, better than expected," on the afternoon of April 7, Xiangdian shares (600416. SH) chairman Zhou Jianjun said at the company's 2020 annual shareholders' meeting.
He said that the company completed the private placement and the equity transfer of XEMC wind energy last year, due to the more thunderstorms in 2019, the fixed increase process was tortuous but finally completed smoothly, and all the funds raised were used to repay liabilities and reduce financial costs; although the XEMC wind energy assets were sold, there will still be related businesses, such as providing core components for it.
This year's key work is to focus on further reducing the company's interest-bearing liabilities, and the second is to expand market share. During the 14th Five-Year Plan period, we will continue to promote the "three-year main business multiplication, benefit increase" plan, focusing on the main business of "motor + electronic control + complete sets".
How to achieve the 5 billion revenue target?
"The company's annual report disclosure time is relatively high, in order to prepare for the removal of the hat in advance," Zhou Jianjun said.
According to the public financial report, XEMC lost 1.912 billion yuan and 1.579 billion yuan in 2018 and 2019, respectively. On April 1, 2020, XEMC was delisted due to two consecutive years of net profit loss, and the stock was changed to "*ST XEMC".
In 2020, the company achieved an operating income of 4.697 billion yuan, a net profit attributable to the parent company of 75.2614 million yuan, and achieved a profit from the stars. On April 1 this year, the abbreviation of XEMC shares was changed from "*ST XEMC" to "XEMC Shares", a full 365 days.
In the secondary market, the share price of XEMC shares achieved a "counterattack", rising by 193% in 2020. The company's latest shareholder register not only involved a number of institutions, but also attracted a number of investors to brave the rain to go to Xiangtan to participate in the company's on-site shareholders' meeting.
An individual investor who has studied military stocks for many years asked on the spot why XEMC's revenue management target this year is positioned at 5 billion yuan and the revenue composition plan, and also asked about the company's long-term development goals in the next few years.
Zhou Jianjun said that the company's revenue of about 4.7 billion yuan last year included wind energy business, if you exclude this piece, the revenue is about 4 billion, after the XEMC wind energy meter, this year's target of 5 billion, compared with last year's growth rate of more than 20%.
According to the financial report, last year, XEMC wind energy was divested, and the company's total revenue fell by 9.77% year-on-year, but the wind power business still achieved revenue of 2.871 billion, accounting for 61.12%.
It is reported that the company's goal during the 14th Five-Year Plan period is to double the revenue, and the provincial state-owned assets will have a guiding requirement for future profits. Suppose that the long-term requirement is to achieve 1 billion profits, but whether it takes 5 years or 10 years to achieve it is difficult to say.
For the composition of the 5 billion revenue target, another executive has split the business, according to this year's planning, focusing on the main business of motors, electronic control, electromagnetic energy, AC motor revenue of about 2.6 billion, low voltage 300 million, a total of 29 billion; electronic control of 2 to 250 million, if done well, to achieve 300 million; other 18 billion or so (counting the military business, but due to confidentiality reasons, it is inconvenient to say more specific). In addition, there are some other parts. The overall total will be a little higher than the 5 billion in the budget, and the business goals set will leave room.
The increase in military business takes time to climb the slope
In the past few years, the wind power business has accounted for the bulk of XEMC's revenue. From 2017 to 2019, the revenue of the company's wind power business accounted for 33.27%, 20.13% and 39.18% respectively. XEMC Wind Energy's poor management has been one of the company's main sources of loss in the past.
The reporter of the Financial Associated Press noted that most of the investors attending the meeting were more concerned about the development of the military business of XEMC.
(Data source: XEMC 2020 financial report)
According to public information, in 2018 and 2019, the revenue of XEMC's military industry sector was 594 million and 559 million, respectively, corresponding to a gross profit margin of 31.27% and 22.56%. From January to September 2020, the military industry's operating income was 418 million yuan, and the gross profit margin fell to 16.97%.
From 2018 to January to September 2020, XEMC achieved net profits of 75.6324 million yuan, 81.5336 million yuan and 110.223 million yuan, respectively. (Note: The annual report does not disclose more details)
According to the company's statement, the gross profit margin of the military industry sector has declined, mainly due to changes in the structure of military products, resulting in corresponding changes in profit margins. The revenue of XEMC's military business is stable, but it has not shown significant growth. In this regard, on-site investors are also more concerned.
The company's senior executives answered on the spot that the company's military business is also undergoing transformation, product pre-research, research and development, trial production to application has a process, the company is a core supporting unit of the military industry, the product in the process of gradual release. Focusing on short-term growth may not look like it's going to be very fast, but expect good long-term compound growth.
With the company's original contract projects landed this year, with the advancement of military-civilian integration in the future, according to his personal understanding, the military business will usher in better opportunities. "Ten years to grind a sword", this business will form a better support for the company's future profitability.
According to the research and analysis of CITIC Construction Investment Securities, XEMC has high technical barriers in the field of military equipment manufacturing. The core technology mastered is mainly the special equipment propulsion technology and launch technology engineering developed by the top domestic high-tech expert team, which is currently the most advanced and international cutting-edge technology in China, and the subsidiary XEMC is the only enterprise in China that has this core technology.
The company effectively stops the bleeding point after divesting loss-making assets, and in the future, the company will focus on the development of two core technologies of ship comprehensive power and electromagnetic emission, and at the same time expand to civil ship electric power promotion, satellite launch, rail transit, offshore wind power and other civilian expansion.
It is worth mentioning that in the supporting production of military equipment system integration, the main competitors of XEMC are the 712th Research Institute and the 704th Research Institute of CSIC.