Industrial engine + hydrogen fuel cell, products used in military aerospace, pre-increase 215% annual report, stock price only 8 yuan
Our products include: precision transmission parts, precision cutting tools and hydrogen fuel cell compressors, some of which have been imported instead.Recently, the enterprise in the annual report pre-increase announcement said that the company’s 2021 annual performance is expected to be 250 million yuan – 310 million yuan, an increase of 154%-215%.In 2020, the company’s annual net profit was only 98.55 million yuan, up 168 percent year on year.In 2021, the company only used three quarters to complete the performance of 237 million yuan, and set a record high since the establishment of the company, the company has undergone a qualitative leap in this year.The company’s stock, which has seen a correction since August last year, has fallen 36 percent in 113 trading days and is worth just over 8 yuan.Main business and core competitiveness (at the end of the article there are the name of the company and the code of the stock, please understand the basic situation of the company objectively and honestly before you reveal the final answer) The secretary of the board of directors of this company is a man, very polite and talkative.Translator: Hello, I am a shareholder of the company. I want to know something about it.Dong Mi: Ok, go ahead.Translator: Excuse me, what is the business of the company?Dong Mi: The business of the company focuses on high-end manufacturing and precision manufacturing. The main products include: compressors, vacuum pumps, hydraulic pumps, high-efficiency precision cutting tools, precision transmission parts and other mechanical products.The company’s compressor products accounted for 43.54% of the revenue, tool products accounted for 29.53% of the revenue, other business revenue accounted for 26.93%.Translator: Excuse me, does the company have hydrogen fuel cell business?Dong Mi: Our company has developed compressors and hydrogen circulation pumps for hydrogen fuel cells.The translator checked the company’s financial statements and found that the hydrogen fuel cell business is currently in the development and testing stage and is not in production.Translator: Excuse me, what are the competitiveness of the company?Dong Mi: Our company’s products have been replaced by imports, among which precision cutting tools have further expanded the market share in aerospace and military manufacturing fields.Knowing the details of the company, let’s take a look at the performance of the company’s net profit.The following information and financial data are derived from the consolidated balance sheet on page 5 and consolidated income statement on page 7 of the Company’s third quarter 2021 financial results, without any personal opinion.In 2021, the net profit of the company only took three quarters to achieve a new record high. The specific performance is as follows: In 2021, the net profit of the first quarter of the company is 78.21 million yuan, up 333% year on year;Net profit in the second quarter was 173 million yuan, up 58 percent year on year;Net profit in the third quarter was 237 million yuan, up 25 percent year on year.And the enterprise’s net profit in the third quarter, in the A shares of industrial machinery plate 45 listed companies, ranked the 11th.The net profit ranked 17th in the sector, indicating that the company is not small, and the company has a small bright spot, that is, profitability is very strong.Profitability is measured by return on equity, which is the ratio of net income to shareholders’ equity.In the third quarter of 2020, the return on equity of the company was 13.01%, which means that the management can earn 13.01 yuan of net profit through production and operation after 9 months by using 100 yuan of shareholders’ money.However, in the third quarter of 2021, the management of the company also used 100 yuan of shareholders’ money, but it made a net profit of 16.2 yuan nine months later, and the return on equity reached 16.2%, an increase of 25% year-on-year.The improvement of roe shows that the company’s earning capacity in the third quarter of last year was significantly enhanced, which is very beneficial to the continuous growth of the company’s future net profit.And the earning power of the enterprise in the third quarter, in the a-share industrial machine plate 45 listed companies, ranked the fourth.The ranking of the earning power of this enterprise is obviously higher than the net profit, which indicates that the profitability of the company is relatively outstanding among enterprises of the same size.The most important part of this paper is to analyze the reasons for the growth of net profits.Through DuPont theoretical analysis, the translator found that the company’s performance in the third quarter of 2021 was mainly due to the acceleration of compressor product sales.Product sales speed, to use the inventory turnover days of the enterprise to measure this index.In the third quarter of 2020, the company sold an inventory of compressors already produced, which takes 140 days.It now takes only 137 days, a 2.2% improvement in sales.Compressor sales speed up, so that the enterprise’s products become popular.This leads to higher revenue and higher performance.In the company’s financial statements, the reason for accelerating product sales is the expansion of the business segment.This shows that the management’s operating capacity improved in the third quarter of last year.Through the detailed analysis above, we know that in 2021, due to the management’s improvement of operating capacity, the company’s business has accelerated expansion, which is the main reason for the company’s net profit growth in the third quarter.The disadvantage of this link is that the translator will start to find fault mode, through the analysis of the company’s main financial data to find the shortcomings and defects of the enterprise.Through the analysis of the translator found that the company in the third quarter of 2021, the biggest shortage is cash flow is not very abundant.In the statement of cash flows, there is an item called “net cash flow from Operating Activities.” It records the cash receipts and expenditures of a business.In the third quarter of 2020, the company’s net profit was 189 million yuan, while its net cash flow reached 292 million yuan.By the third quarter of 2021, the company’s net profit reached 237 million yuan, while its net cash flow fell to 211 million yuan, down 28 percent year on year.Net income rose while net cash actually earned from operating activities fell, which is not a good thing.Because there is a possibility that the management relaxed the sales policy and extended the sales account period in order to improve the business income, which is very unfavorable to the company’s production and operation.Although this is just the translator’s guess, but no matter what the net cash flow decline, it indicates that the company’s cash flow is not very rich, which needs attention.Through the analysis of the full text, we know that this is an enterprise that simultaneously drives on the industrial engine and hydrogen fuel cell track.Not only did the company see consecutive growth in 2021, it also hit an all-time high in the third quarter.The company’s third-quarter net profit jumped mainly because management improved operating capacity and expanded business segments.Although the net profit rose, the liquidity of the company declined and the net cash flow declined significantly, which are the shortcomings of the company.If the fundamentals of the company are divided into five levels of A, B, C, D and E from high to low, the translator personally believes that the company can maintain the LEVEL of C.This enterprise is Bowes Co., LTD., stock code 300441.Note: Stocks of companies with sound fundamentals do not necessarily rise.But for those stocks that can continue to rise, the fundamentals of the company must be very good.This article did not recommend the stock of Bowes, nor did it say how good Bowes is, but refined translation of the company’s financial results.