The top ten gold stocks that institutions are unanimously optimistic about on Wednesday

Xianheng International (605056) In-depth Report: MRO Intensive Service Leader Deep Roots Power Grid Multi-point Blossom

Category: Company Institution: Cinda Securities Co., Ltd. Researcher: Luo Zheng/Liu Chongwu Date: 2021-09-14

MRO intensive service leader, set up a number of employee shareholding platforms to bind the core management. The company is China's tools, instruments and meters and other products MRO intensive supply leader, currently mainly focused on the power industry, but also in the vigorous expansion of petroleum and petrochemical, photovoltaic, nuclear power, emergency, railway, urban rail transit and other fields. The company's products are divided into its own products and distribution, in recent years, the proportion of the company's own products with high gross profit margin is increasing year by year, reaching 19.1% in 2020. At the same time, it also represents the sales of international well-known brands such as FLIR in the United States, FLUKE in the United Kingdom, OFIL in Israel and ASAHI in Japan. From 2017 to 2020, the company's revenue increased from 1.055 billion yuan to 1.991 billion yuan, with a compound annual growth rate of 23.58%,58% and the net profit attributable to the mother increased from 160 million yuan to 238 million yuan, with a compound annual growth rate of 14.15%. At the same time, the company has set up a number of employee shareholding platforms such as Xianning Investment, Wanning Investment, Hongning Investment, Dening Investment, Yining Investment, etc., which deeply binds core employees to the company through the employee shareholding platform, which is conducive to the company's medium- and long-term development.

Deeply rooted in the power grid, vigorously develop petroleum and petrochemical, emergency and large transportation and other fields. At present, the global MRO market size exceeds 600 billion US dollars, and China's MRO market also exceeds one trillion yuan. At present, MRO is in the transition stage from traditional procurement to intensive procurement, and there is great potential for the growth of MRO intensive procurement in the future. The power grid is a representative industry of MRO intensive procurement, with an annual operation and maintenance market size of more than 40 billion yuan, and with the commissioning of new power grid projects, the demand for existing projects such as operation and maintenance is increasing. The company has been deeply rooted in the power grid industry for more than 20 years, with complete products and rich project experience, and is the most competitive MRO intensive supplier in the power grid field, with a current market share of less than 5%, and great potential for future growth. In addition, the penetration rate of MRO collection and production in the petroleum and petrochemical field is also continuously improving, PetroChina, Sinopec, CNOOC and the State Pipeline Network Company are the company's key customers; in the emergency field, the company has built a "Saifu City" emergency experience hall in Hangzhou, Wuhan, Changsha and other places, on the one hand, to carry out emergency publicity, experience and training services, on the other hand, to provide maintenance and other technical services for the company's products. In the future, while continuing to take root in the power grid, the company will also vigorously expand the demand for petroleum and petrochemical, photovoltaic, nuclear power, emergency, railway, urban rail transit and other fields.

Benchmarking the global MRO intensification leader, the company has great potential for future growth. By comparing Xianheng and the global MRO intensive supply leader, it can be found that: (1) MRO is a trillion market, the revenue scale of global leaders such as Gu'anjie and Quick Buckle has reached tens of billions of yuan, while Xianheng's revenue is only 1.99 billion yuan, and the future growth space is very large; (2) China has low labor costs and low raw material cost advantages, and the company's profitability is at a medium or upper level compared with the global MRO intensive leader; (3) the market gives the global MRO intensive leader a higher valuation. As a domestic MRO intensification leader, Xianheng has more room for growth in the future, is expected to maintain faster growth, and is expected to enjoy a higher valuation. As a domestic MRO intensification leader, Xianheng International mainly has the following competitive advantages: (1) perfect sales network, deeply rooted in second- and third-tier cities. The company has set up 37 sales and service agencies across the country, with more than 600 sales and technical service teams, and the sales and service channels have sunk to second- and third-tier cities; (2) strong supply chain guarantee timely performance. The company can supply more than 180,000 kinds of MRO of SKUs for downstream customers, and the company's long-term cooperation with suppliers has reached 1500, while the company has set up warehouses in many parts of the country, and a strong supply chain is the guarantee for the company's timely performance; (3) Deeply rooted in the industry for many years, with rich project experience. The company has been deeply rooted in the industry for more than 20 years, has a very good understanding of product performance parameters, and has rich project experience, and the project bidding rate is higher.

Earnings Forecast and Investment Rating: We expect the company's net profit from 2021 to 2023 to be 261 million yuan, 336 million yuan and 481 million yuan, respectively, and the corresponding EPS is 0.65 yuan / share, 0.84 yuan / share and 1.20 yuan / share, corresponding to the current stock price PE of 32 times, 25 times and 18 times, respectively. For the first time, the company is given a "buy" rating.

Stock price catalyst: grid capital expenditure increased; the petroleum and petrochemical industry received large orders.

Risk factors: The expansion of new industries is less than expected, and the competition in the industry is intensifying.

Tianzheng Electric (605066): Leader in low-voltage electrical appliances The new power system brings an incremental market

Category: Company Institution: Northeast Securities Co., Ltd. Researcher: Wang Fenghua Date: 2021-09-14

Report Summary:

The company is a leading enterprise of low-voltage electrical appliances, and the differentiation strategy helps the rapid growth of scale. Since 2016, the company's net profit attributable to the mother has continued to grow, the profitability is stable, and the fluctuation of raw material prices has a greater impact on the gross profit margin of the main business. The company's main business layout continues to improve, the formation of distribution appliances, terminal appliances, control appliances and power supply appliances four major product categories, with a full range, multi-level low-voltage electrical product lines, strategic layout of high barriers product lines, focusing on expanding emerging, high-prosperity subdivisions and large-scale intelligent single projects.

The new power system brings an incremental market for low-voltage appliances, and new customers + new markets enhance performance certainty. With the construction of a new power system with new energy as the main body, the proportion of china's electric energy in terminal energy consumption is expected to gradually increase, and the high growth of electricity consumption will further promote the demand for power generation equipment and bring an incremental market for low-voltage electrical appliances. In 2020, the domestic low-voltage electrical appliance market size is about 96 billion yuan, and the overall market size is expected to exceed 100 billion yuan in 2021, and the INDUSTRY WILL HAVE A CAGR of about 8% in the next 5 years. From the perspective of downstream demand, electricity and construction are the two largest markets, of which the construction of smart grids has promoted the steady rise in demand in the power industry, and the advanced reserves of the power industry have the advantage of being the first mover. At the same time, the area of new domestic real estate starts has maintained steady growth, and the sales volume of low-voltage electrical appliances in real estate is expected to achieve high growth. The company's strategic layout of new energy, communications, rail transit and other high-boom tracks, policy orientation to promote domestic substitution, the strategic layout in emerging industries will gradually land, can achieve import substitution of high-end products in the next three years can maintain more than 60% growth.

Management optimization, sales orientation into product demand orientation, empowering enterprise development. In terms of marketing, the company adopts the marketing strategy of "dual brand" + "dual track system". In terms of regional coverage, the company will continue to increase sales liaison offices in key cities to achieve intensive cultivation of key regions and key industries, and complete all-round, multi-field and deep-level regional and industry coverage. The optimization of the management level is conducive to the further improvement of the company's performance. Channel construction strengthens the control ability of distribution and distribution system by introducing mechanisms such as competition, assessment and elimination, and ultimately realizes the effective docking of sales channels and industry needs, and achieves a development pattern of product strength and channel immediate response, cooperation and feedback.

Investment advice: We forecast that the company's operating income for 2021-2023 will be 3.188/40.40/5.047 billion yuan, and the net profit attributable to the parent will be 3.58/5.02/674 million yuan, corresponding to EPS of 0.89/1.24/1.67 yuan, corresponding to PE 16.76/11.93/8.89X, respectively, and the first coverage will give a "buy" rating.

Risk warning: Customer expansion is less than expected, raw material prices fluctuate, and industry competition intensifies

Yanghe shares (002304): ready for development, elasticity can be expected

Category: Company Institution: Zheshang Securities Co., Ltd. Researcher: Ma Li/Zhang Xiaoqian Date: 2021-09-10

event

The company released the 2021 interim report, the company's 2021H1 achieved revenue of 15.543 billion yuan, net profit attributable to the mother of 5.661 billion yuan, deduction of non-net profit of 5.168 billion yuan, respectively, an increase of 15.75%, 4.82%, 21.13%, of which 2021Q2 company revenue, attributable net profit, deduction of non-net profit were 50.23, 17.99, 1.357 billion yuan, respectively, an increase of 20.74%, 28.61%, 27.50%.

Investment essentials

The 2021H1 performance is in line with expectations, and the channel adjustment is basically completed

2021H1 The company's revenue and non-net profit increased by 15.75% and 21.13% year-on-year, respectively, of which liquor revenue was 15.063 billion yuan (+17.06%), and the gross profit margin increased by 0.37 percentage points over the same period last year to 75.66%, specifically:

Products: 21H1 medium and high-grade liquor (Yanghe Blue Classic Series, Su Liquor, Zhenbaofang), ordinary liquor (Yanghe Daqu, Shuanggou Daqu) revenue was 125.53 and 2.601 billion yuan (+16.48%, +19.18%), respectively, the proportion of medium and high-end liquor revenue fell slightly by 0.32pct to 82.84%; 21H1 liquor sales increased by 29.96% year-on-year to 91,300 tons, and the ton price fell by 9.92% to 164,900 yuan / ton mainly due to the low-grade liquor volume dragging down the ton price. It is expected that 2021H1 Dream Blue will achieve a high growth rate of more than 20%, of which M6+ will achieve more than 40% growth, while the promotion speed of the M3 crystal version will be slightly less than expected, or it will decline in the same period last year, while Sea Blue and Sky Blue will achieve positive growth, and Shuanggou will achieve a high growth of 46.7% (of which the first row of Su wine increased by 256.4%, and the green Su increased by 80.3%).

The company's current development momentum is better, the channel adjustment is basically completed, Dream 6+, Dream 3 Crystal Edition, Sky Blue (new version), Sky Blue (old version), Ocean Blue batch price respectively stand at 620, 430, 320, 290, 120 yuan, the main single product inventory of about 1 month, is expected to complete the annual payment task at the end of the third quarter, channel feedback as a whole is more positive.

Channels: 21H1 income in the province and outside the province increased by 16.3% and 17.5% respectively, and the income outside the province accounted for about 52%; the number of dealers in the province and outside the province increased by 51 and 61 to 3167 and 5996 respectively.

Market: the income of the province and outside the province was 7.225 and 7.929 billion yuan (+16.27% and +17.54%) respectively, and the proportion of income outside the province increased by 0.27pct to 52.33%, and the market outside the province expanded steadily.

Structural upgrades and cost control have significantly improved profitability

2021H1 The company's gross profit margin and deducted non-net profit margin were 74.43% and 33.25%, respectively, an increase of 1.22 and 1.48 percentage points year-on-year, mainly due to: 1) Dream 6+ in the sub-high-end upgrade price band, leading the structural upgrade; 2) the cost control effect is remarkable: 2021H1 The company's expense rate during the period decreased by 1.11 percentage points to 14.85% compared with the same period last year, of which the sales expense ratio fell by 0.18 percentage points to 8.62%, and the management expense ratio decreased by 0.55%. Percentage points to 6.89%, financial expense ratio fell by 0.38 percentage points to -0.66%, of which the sales expense ratio fell mainly due to travel expenses fell by 16.79%, advertising and promotion expenses still increased by 27.53%. In terms of cash flow, the net cash flow of operating activities of 21H1 Company was 2.093 billion yuan, an increase of 176.58% year-on-year; in terms of advance receipts, the 2021H1 advance receipts (contract liabilities + other current liabilities) were 5.603 billion yuan, down 756 million yuan from 21Q1 and 1.655 billion yuan year-on-year.

Sky Blue's upgrading is advancing in an orderly manner, and Dream 6+ leads high-quality development in the short term: the employee stock ownership plan has landed, and Sky Blue has been smoothly upgraded. 1) The company officially disclosed the employee stock ownership plan in July this year, which has the characteristics of wide coverage, high subscription premium, positive assessment targets, etc., and comprehensively strengthens the cohesion and vitality of the middle and high levels and grass-roots level. 2) Sky Blue was officially renewed in August, quality, packaging, marketing comprehensive upgrade, taste presents "one product three fragrances, smooth and comfortable", packaging image is more prominent romantic fashion, marketing using bottle code + box code + promotion, channel mode using strategic alliance mode, in the form of core alliance stores to focus on operation, it is expected that the new version of Sky Blue will complete the first round of shopping in early September, batch price, transaction price increased to 320 yuan, 368 yuan, the replacement of Sky Blue helps the company to stand firm in the sub-high-end basic price band, for dream 6+ The power of the foundation is laid.

Long-term: Dream 6+ as the core growth pole, Shuanggou expensive wine to increase performance, to help the company's 14th Five-Year Plan high-quality development.

We believe that the company has two major growth poles in the future: 1) Dream 6+ is expected to become the first ten-billion-dollar single item in the sub-high-end upgrade price band: the current Dream 6+ can still maintain the steady rise in the batch price in the continuous volume, the inventory is at a historical low, the provincial market layout is basically completed, and the focus is on the layout of other provincial capital markets and key cities, and the current inventory price of the Dream 3 Crystal Edition is benign and will follow the M6+ to achieve accelerated development. 2) Shuanggou noble wine thickening performance:

With profound cultural heritage, independent operation, and the comprehensive empowerment of the chairman's presidency, it is expected that Shuanggou will achieve a sales target of 4 billion yuan this year, and Sujiutou Paijiu, Lusu and Jumbofang will perform better; although the current scale of guijiu is small (the revenue in 2020 is about 180 million yuan), the rich production capacity of its reserves lays the foundation for its rapid development under the heat of sauce and wine. In addition, following the new addition of Sky Blue, Ocean Blue may be upgraded at the end of the year, thereby promoting the product structure to move up and further increasing channel profits.

Earnings forecasts and valuations

Under the leadership of the rapid development of Dream 6+, we believe that the short-term disturbance of the off-season epidemic will have a limited impact on the whole year, and the company's performance will accelerate this year, and the performance may exceed expectations. It is estimated that from 2021 to 2023, the company's revenue growth rate will be 18.0%, 20.2% and 18.0%, the net profit growth rate will be 14.1%, 20.4% and 18.4%, the EPS will be 5.7, 6.8 and 8.1 yuan per share, respectively, and the corresponding PE will be 30, 25 and 21 times, respectively. It currently corresponds to a valuation of 29.8 times in 2021. In the long run, the performance is highly certain, the current valuation is cost-effective, and the buy rating is maintained.

Catalyst: inventory decline, terminal price increase; Dream Blue M6+ sales continue to improve.

Risk warning: 1, the epidemic has repeatedly affected the sales of liquor; 2, the dream blue M6 + sales situation is less than expected.

Dahua Co., Ltd. (002236): Stable growth in performance Diversified layout of video IoT leaders

Category: Company Institution: Southwest Securities Co., Ltd. Researcher: Wang Mou Date: 2021-09-10

Performance summary: In 2021H1, the company achieved operating income of 13.51 billion yuan, an increase of 37.3% year-on-year; and achieved net profit attributable to the mother of 1.64 billion yuan, an increase of about 20.0% year-on-year.

Thanks to the sinking of domestic channels and the active layout of overseas, the company's performance achieved stable growth. 2021H1: 1) From the revenue side, the company's smart IoT products and solutions achieved revenue of 11.58 billion yuan, up 33.8% year-on-year, accounting for 85.7%; thanks to the orderly promotion of machine vision, video collaboration and smart home and other businesses, the company's innovation business revenue was 550 million yuan, a substantial increase of 94.3% year-on-year, and revenue accounted for 8.9%; other business revenue was 730 million yuan, up 29.1% year-on-year, and revenue accounted for 5.4%. 2) From the perspective of profit, the company's revenue was 13.51 billion yuan, up 37.3% year-on-year; net profit attributable to the mother was 1.64 billion yuan, up 20.0% year-on-year. 3) From the expense side, the company's sales expense ratio was 15.3%, down 3.1pp year-on-year; the management expense ratio was 2.9%, down 0.7% year-on-year; the research and development expense rate was 10.4%, down 3.0% year-on-year, and the "three fees" rate was reduced, and the expense end was better controlled.

The company actively grasps the development trend of the industry and further deepens the layout of innovative business. In the practical application of AI, the company deeply cultivates various sub-sectors, understands the fragmented needs of the industry, and solidifies the know-how capabilities of the industry in the form of software and so on. The company digs deep into the value of data and forms the ability to create practical value for customers. In addition, the company attaches great importance to the cultivation of innovative business, relying on the company's deep accumulation in the video IoT industry, and continues to expand new high-speed growth areas. During the reporting period, the company's innovation business achieved an overall revenue of 1.20 billion yuan, an increase of 94.3% year-on-year, which is a force for the company's future rapid growth.

In the face of global uncertainty, the company has deeply cultivated artificial intelligence and accelerated digital transformation and upgrading. The COVID-19 epidemic in 2021 continues to spread, the United States continues to sanction and restrict some Chinese technology companies, and the global semiconductor supply chain has experienced phased and structural imbalances. The company adheres to a variety of R & D strategies to ensure stable alternative updates of products, and ensures the stability of raw material supply by increasing stocking and strengthening strategic cooperation with suppliers. In addition, the company also promotes global digital transformation, adapts to the times to upgrade and accelerate the layout, and rapidly improves the differentiation and complexity of the business.

Profit forecasts and investment advice. It is estimated that from 2021 to 2023, the company's EPS will be 1.48 yuan, 1.77 yuan and 2.18 yuan respectively, and the compound growth rate of net profit attributable to the mother in the next three years is expected to reach more than 18%. We conservatively give the company a 23 times PE valuation in 2021, corresponding to a target price of 34.12 yuan, covering it for the first time and giving a "buy" rating.

Risk Warning: The risk of uncertainty in downstream demand brought about by the repeated outbreak of the new crown epidemic, the risk of exchange rate fluctuations, and the risk that the company's technology research and development does not meet expectations

Wolong Electric Drive (600580): Performance in line with expectations Motor and control business is the world leader

Category: Company Institution: Southwest Securities Co., Ltd. Researcher: Han Chen/ Ao Yingchen Date: 2021-09-10

Performance summary: The company achieved operating income of 6.744 billion yuan in 2021 H1, an increase of 13.45% year-on-year; achieved a net profit attributable to the mother of 419 million yuan, an increase of 15.75% year-on-year; achieved a net profit of 350 million yuan, an increase of 23.78% year-on-year, EPS0.32 yuan, the performance is in line with expectations.

The motor business is an industry leader in many fields. According to HIS Markit market data, in 2020, the company's global high-voltage motor market share of about 11%, ranking second in the world; the global low-voltage motor market share of about 6.5%, ranking fourth in the world; in 2019, the company's air-conditioning motor share of 6%, ranked fifth in the country; washing machine motor company with a share of 9%, the domestic ranked second, the company's motor business occupies a higher market share in the segment.

Accelerate the expansion of electric vehicle business and deeply bind high-quality customers. As a company of new energy vehicle drive systems, the company's products cover a complete product chain from passenger cars, SUVs, commercial vehicles, light, medium and large buses, including drive motors, pure electric drive traction systems, hybrid traction systems and vehicle assembly automation systems. In recent years, the company has successively expanded high-end OEM customers such as Mercedes-Benz, BMW, Porsche, Jaguar, Land Rover, etc., and obtained the Zhejiang Xinke Transmission Fixed Point in January this year, indirectly supporting the Geely PMA platform, and supporting the Wuling Hongguang Mini EV in May, forming a low-end, high-end, domestic and foreign customer coverage, full orders, stability, and the motor business is expected to continue to increase.

The marketing network is complete, and the brand advantages at home and abroad are strong. The company's three-dimensional marketing model built by regional sales, industry sales and product managers forms a perfect coverage for terminal owners, OEMs and design institutes.

Up to now, the company has Wolong, Nanyang explosion-proof and other domestic leading brands, as well as international century-old well-known brands, such as Brook Crompton (Burton), Morley (Morley), Laurence Scott (Lawrence), Schorch (Schorch), ATB (Ortepec), etc., and obtained the brand use rights of GE (General Electric) for 10 years, and has a high brand reputation in the high-end market in the segment.

Profit forecasts and investment advice. We selected three comparable companies in the industry with an average PE of 22, 18 and 15 times from 2021 to 2023, respectively. The company is deeply engaged in the motor and drive industry, low voltage, high voltage, micro motor and drive product iteration speed accelerated, performance to maintain stable growth, is expected in the next three years attributable to the mother net profit compound growth rate is expected to reach 20.46%. On the basis of the average PE of comparable companies, we gave the company 22 times PE in 2021, with a target price of 19.36 yuan, and gave a "buy" rating for the first time.

Risk Warning: Macroeconomic Risk; Market Competition Risk; Risk of Raw Material Price Fluctuation; Exchange Rate Fluctuation and International Trade Environment Risk.

C&D Co., Ltd. (600153) 2021 Interim Report Comments: Benefiting from the boom in the commodity industry The supply chain business has grown rapidly

Category: Company Institution: Everbright Securities Co., Ltd. Researcher: Cheng Xinxing Date: 2021-09-14

Event: The company released its 2021 semi-annual report. In the first half of 2021, the company achieved operating income of about 290.8 billion yuan, up 85% year-on-year; achieved a net profit attributable to the mother of 2.56 billion yuan, up 12.5% year-on-year; and achieved a net profit of 2.50 billion yuan, up 34.2% year-on-year. The company will not pay dividends for the half year of 2021.

Adhere to professional operation, the supply chain business has grown rapidly. The company's supply chain business operating income in the first half of 2021 reached 266.6 billion yuan, an increase of 87.6% year-on-year, mainly due to the background of the high prosperity of the bulk commodity industry in the first half of 2021, the company's metallurgical raw materials and agricultural and forestry products and other business scale increased significantly (ferrous, non-ferrous metals and mineral products, agricultural products, pulp and paper, energy chemical products and other operating goods more than 76 million tons, a year-on-year growth rate of more than 45%); in addition, the company based on the mature "LIFT" supply chain service system, Expanding the service field to the consumer goods field and the new energy industry chain, in the first half of 21 years, the company's consumer goods industry supply chain business achieved operating income of more than 14 billion yuan, a year-on-year growth rate of nearly 20%, and the new energy industry supply chain business achieved operating income of about 2.5 billion yuan, an increase of about 38% year-on-year; in addition, the company based on the "double cycle" pattern, accelerated the "international" layout, the total import and export and international trade in the first half of 21 years exceeded 15.6 billion US dollars, a year-on-year growth rate of about 95%.

In the first half of 2021, the gross profit margin of the company's supply chain business was about 2.12%, an increase of 0.25pct year-on-year; the net profit margin was 0.61%, an increase of 0.03pct year-on-year; and the net profit attributable to the mother was about 1.60 billion yuan, an increase of about 96.0% year-on-year.

The high-quality land reserve is sufficient, and the real estate business is growing rapidly. In the first half of 2021, the subsidiaries C&D Real Estate and Lianfa Group achieved a total sales amount of 119.7 billion yuan, an increase of 155% year-on-year, and realized equity sales of 92.6 billion yuan, an increase of 179% year-on-year. In the first half of 2021, the company's real estate business achieved operating income of 24.25 billion yuan, an increase of 57.3% year-on-year. In the first half of 2021, the gross profit margin of the company's real estate business decreased by 12.8pct to 16.2%, the gross profit of the real estate business fell by 3.9% year-on-year to 3.93 billion yuan, and the net profit attributable to the mother was 954 million yuan, down 34.49% year-on-year, mainly due to the decline in the profit of the land primary development business recognized in the first half of 21 years compared with the same period last year.

As of the end of June 2021, the land reserve area (equity caliber) that C&D Real Estate and Lianfa Group had not yet sold reached 22.54 million square meters, of which the land reserve area (equity caliber) in first- and second-tier cities accounted for more than 70%, a significant increase compared with the end of 2020 (59.6%). In addition, as of the end of June 2021, C&D Real Estate and Lianfa Group's property management companies managed a project area of 42.1 million square meters, an increase of 3.29 million square meters over the end of the previous year.

Investment advice: The company as the head of the supply chain enterprises, in terms of operational efficiency, capital costs, risk control capabilities and other aspects have a strong strength, although the company's supply chain business gross margin and net profit margin is low, but the return on net assets is higher (over the years to maintain more than 10%), with the company's refined management continues to deepen, the supply chain business return on net assets to a higher level; at the same time, the company continues to give full play to the advantages of real estate development, to maintain the quality growth of real estate sales. We maintain our 21-23 year net profit forecasts of $4.9 billion, $5.5 billion and $6.2 billion, respectively; we maintain the company's "Overweight" rating.

Risk Warning: Commodity price fluctuation risk, such as a short-term sharp decline in commodity prices, resulting in customer default; operational risks, such as partner default, loss of goods, etc.; capital risk, such as the rise in the cost of funds caused by the decline in rating; decline in real estate prosperity, real estate business revenue and profit margin decline.

Shandong Gold (600547) controlling shareholder increase plan comments: The group's increase in shareholding shows confidence The short-term impact does not change the company's good trend

Category: Company Institution: Northeast Securities Co., Ltd. Researcher: Zeng Zhiqin Date: 2021-09-14

Event: On September 12, the company announced that the controlling shareholder, Shandong Gold Group, plans to increase its holdings in a cumulative amount of not less than 0.0112% of the company's total share capital and not more than 0.5% of the company's total share capital in the three months from September 10, 2021, and the total amount of the increase will not exceed 500 million yuan, and the price will not be higher than 22.39 yuan per share.

Controlling shareholders increased their holdings, demonstrating firm confidence. The controlling shareholder, Shandong Gold Group, plans to increase its holdings in the company by about 500,000-22.36 million shares, with a total amount of not more than 500 million yuan, and the price is not higher than 22.39 yuan per share (12% higher than the closing price of 9/12 on the announcement date), and the gold group promises not to reduce its holdings within 12 months after the implementation of the increase plan (the regulatory provisions are only 6 months). On September 10, gold group has increased its holdings by about 500,000 shares through a centralized auction, and the increase price is about 19.99 yuan per share. The increase in shareholding reflects the Group's firm confidence in the Company's development prospects and recognition of the value of the Company's growth.

The negative factors that dragged down the company's performance in the first half of the year are gradually being eliminated. 1) Exogenous factors dragged down the company's performance: Affected by the safety accidents of two gold mines in Shandong Province (both non-shandong gold subsidiaries) in early 2021, non-coal mines in Shandong Province conducted safety inspections since February, resulting in the company's mineral gold production in the first half of the year -51.1% year-on-year, and revenue/attributable net profit -64.1%/-218.3% year-on-year. 2) The current negative factors are gradually eliminating. As of the end of August, the four main mines such as SanshanDao Gold Mine, Xincheng Gold Mine, Jiaojia Gold Mine and Linglong Gold Mine Dongfeng Mining Area have resumed production, and the average daily production capacity has recovered to 60% in 2020. In August, the company has achieved breakeven for the month, and various operating indicators have gradually improved.

The integration of resources has accelerated, and the company's medium- and long-term basic orientation has not changed. 1) As of the end of 2020, the company's gold equity resources are 851 tons, ranking the forefront in China; at the same time, most of the company's gold mines have higher grades, about 3-7 grams/ton, and the resource endowment is better. 2) In the first half of 2021, the company acquired Australian Cardino Resources and Hengxing Gold, adding 295 tons of new gold equity resources; at the same time, in August, the company announced the acquisition of a number of assets of the group such as Geological Mineral Laijin, Hongsheng Mining, Laizhou Ludi, Tiancheng Mining, etc., to accelerate the integration of mining rights, enhance resource reserves and production scale, and enjoy higher growth in the future.

The Fed's policy is "easy to loosen and difficult to tighten", and gold prices may remain high. As the Fed's policy is facing the inflection point of tightening, the short-term gold price upward momentum is insufficient; but due to the impact of high debt, sluggish demand, and repeated epidemics, the Fed's policy is likely to remain loose, the DOLLAR weakens, and gold prices may fluctuate at a high level.

Earnings Forecast and Investment Advice: Net profit attributable to the parent in 2021/2022/2023 is expected to be -3.4/17.2/2.12 billion, taking into account the company's continuous integration of high-quality gold resources, covering and giving an "overweight" rating for the first time.

Risk Warning: Gold price fluctuation risk, policy change risk, mine acquisition progress is less than expected

Gujia Home (603816): Add 1 million sets of software production capacity to enrich high-end production lines and power functional sofas

Category: Company Institution: Pacific Securities Co., Ltd. Researcher: Chen Tianjiao/Pang Yingying Date: 2021-09-14

Announcement of new capacity additions. The company plans to invest 2.5 billion yuan to build 1 million sets of soft home furnishing and its supporting products project in Qiantang District, Hangzhou. The project is expected to start construction in the first quarter of 2022, with a construction period of 36 months, and the first phase of the project will be completed and put into operation before the end of 2023, and the project is expected to achieve operating income of about 4.35 billion yuan and net profit of 330 million yuan when the overall project reaches the outline.

Comments:

Increase the production capacity of the East China region rich high-end product line, layout function iron frame and motor power function sofa. The company intends to invest 2.5 billion yuan in Hangzhou Qiantang District to build a new set of 1 million sets of soft home and supporting industry projects, the project is mainly engaged in the production of high-end soft sofas, high-end intelligent function sofas, high-end mattresses, intelligent control system function iron frames, motors and supporting, intelligent system supporting and other furniture industry chain products. This project focuses on high-end product lines, such as the layout of high-end mattresses to enrich the price positioning of mattresses, and the creation of functional iron frames and motors, which is expected to enhance the cost advantage of functional sofas.

The production capacity continues to expand, providing capacity guarantee for expanding market share. At the end of August this year, the company announced that it intends to invest 1.2 billion yuan to build a southwest production base in Chongqing, mainly covering sofas, soft beds, mattresses and other products, which is expected to start construction in the first quarter of 2022, the project construction period is 20 months, and it is expected to be completed and put into operation before the end of 2023, and the overall operating income is expected to achieve about 2.5 billion yuan. The new southwest production base will help shorten the transportation cycle, reduce production costs, and increase the market expansion in the southwest region. Previously, the company has laid out production capacity in Hangzhou Xiasha, Hangzhou Jiangdong, Zhejiang Jiaxing, Hubei Huanggang, Hebei Shenzhou, Chongqing base to increase the production capacity layout in southwest China, Hangzhou Qiantang District to further enrich the production capacity in East China, the company's production capacity layout continued to expand.

Channel reform promotes category integration, and the logic of domestic sales continues to be verified. The company continues to explore the "1+N+X" channel model, actively adjusts stores, and accelerates the layout of large stores and comprehensive stores. The implementation of "customization + software" integration, the big store model to promote the drainage between categories, while achieving the steady growth of the advantages of the leisure sofa, to ensure the rapid growth of customization, function, mattress three high potential categories. In addition, the regional retail center improves operational efficiency, the headquarters undertakes trunk logistics, and the information system empowers the terminal. The company works together through channels, products and management to enhance domestic sales capabilities and increase market share.

It is expected that the company's EPS in 2021-2022 will be 2.71 and 3.39 yuan, respectively, corresponding to PE of 24 and 19 times, respectively. Considering the upward sales boom inside and outside the industry, the company has created a rich product matrix, "1 + N + X" diversified channel layout, large store model to promote category integration, regional retail centers to improve operational efficiency, the company's medium and long-term growth path is clear, maintaining a "buy" rating.

Risk warning: the degree of real estate prosperity is lower than expected, channel expansion is not as expected, etc.

Desheng Technology (002908) Company Dynamic Comments: Acquisition of 51% equity of Golden Huaqin + "1+1>2" two-way empowerment

Category: Company Institution: Great Wall Securities Co., Ltd. Researcher: Liu Peng/Cai Weiwei Date: 2021-09-14

Event: On September 11, the Company announced its intention to acquire a 51% stake in Beijing Golden Huaqin Data Service Co., Ltd. for RMB91.8 million (including tax).

Desheng Technology acquires 51% of the equity of Golden Huaqin, in the field of human resources, to enhance the company's profitability and cash flow: the company issued an announcement on September 11 to acquire 51% of the equity of Beijing Golden Huaqin Data Service Co., Ltd. for 91.8 million yuan (including tax), Golden Huaqin deeply cultivates the field of human resources service software, links customers and service providers through the Internet platform, provides customers with salary, social security and welfare outsourcing services, and has now achieved coverage in 30 provinces and municipalities directly under the Central Government.

Golden Huaqin promises to achieve a net profit of 18 million and 21.6 million yuan in 2022 and 2023 respectively, which will provide effective support and supplement for the company's operating income and net profit, enhance the company's profitability, and under the premise that the target company successfully completes the 2022 and 2023 VAM profits, the company will initiate the acquisition of the remaining 49% of the equity. At the same time, based on the business model of Golden Huaqin first receiving payment and then serving, the cash flow is sufficient, which can effectively improve the company's cash flow situation and improve the company's capital allocation ability.

Mergers and acquisitions help the company to achieve the extension of the business model chain to the 2B2C end, and the product, technology and operation service capabilities will be comprehensively improved: In terms of products, Golden Huaqin's core product "Pro-family Xiaobao" is oriented to small and micro enterprises and flexible employment individuals in the Internet platform model, integrating more than 100 high-quality human resources service enterprises in the country, ranking high in the "social security" category in major application stores all year round, and the number of updates is significantly higher than that of peers, and the strength of the product side is remarkable. In terms of technology, the low-code development platform "Uniplat" independently developed by Golden Huaqin can quickly complete product development based on the needs of human resources operation, which helps to improve the company's modular development and rapid response capabilities on the technical side. In terms of operational services, the characteristics of Golden Huaqin's social security services for individuals are fully complementary to the company's ability to provide project implementation mainly for the government, and this merger will help Desheng achieve the extension of the business model chain. On September 10, the Ministry of Human Resources and Social Security and other 4 departments jointly guided 10 enterprises such as Meituan, Ele.me, didi, etc., emphasizing the effective protection of the rights and interests of flexible employees, and Golden Huaqin has a complete ability to provide operational services for small and micro enterprises and individuals with flexible employment.

"1+1>2" two-way empowerment to achieve dual complementarity between the business side and the market end: at the business level, the company has formed a considerable data accumulation based on the deep experience of social security business in more than 150 cities across the country, which is expected to help Golden Huaqin dig up the potential market, while on the other hand, Golden Huaqin can make up for the company's C-end and B-end human resources service gaps, thereby helping the company to achieve the extension of the business model chain. At the market level, at present, the company's human resources big data business is concentrated in non-first-tier cities, while Golden Huaqin's main business is concentrated in first-tier cities such as Beijing, Shanghai and Shenzhen, which can achieve regional complementarity. Previously, the company has successfully cooperated with Golden Huaqin on the Bijie project, and the new business model is expected to be copied quickly after the merger.

21H1 Company successfully undertook the "Labor Information Data Collection and Analysis Service Project" in Bijie City, Guizhou Province, and cooperated with Golden Huaqin in Bijie to explore a new model of human resources operation based on the perspective of the city and the government, which will be further promoted throughout the country after the merger, and the combination of 1+1>2 between the two sides will greatly enhance the company's operational capabilities and help the company's business to leapfrog at a strategic level.

Investment proposal: This transaction is an important step in the company's business strategy of "human resources operation services based on big data", and it is also an important beginning for the company to start capital operations. The company is expected to have revenue of 783 million, 1.173 billion and 1.751 billion yuan in 2021-2023, net profit attributable to the parent of 122 million, 181 million and 262 million yuan, EPS of 0.61, 0.90 and 1.31 yuan per share, pees of 29X, 20X and 14X respectively, maintaining a "buy" rating.

Risk tips: The replacement rate of the third-generation card is not as expected, the promotion of information application is not as expected, the policy landing is not as expected, and the macroeconomic risk is not as good as expected.