\u3000\u3000 Xcmg Construction Machinery Co.Ltd(000425) (000425)
Event: on January 25, the company disclosed the performance forecast of 2021. It is estimated that the net profit attributable to the parent company is 5.5-6 billion yuan, an increase of 47.50-60.91% over the same period of the previous year. It is calculated that the net profit attributable to the parent company in Q4 is 890-1.39 billion yuan, a year-on-year increase of - 31% - 7%.
In the fourth quarter of 2021, the growth rate of real estate and infrastructure slowed down, and the construction machinery industry was greatly affected. However, during the reporting period, the company's operating revenue continued to grow steadily, the profitability continued to improve, and the performance still maintained rapid growth, which is not easy. The year-on-year decrease of Q4 performance is related to two factors: 1) 2020q4 has a high base; 2) In 2021q4, the overall trend of real estate and infrastructure is downward, and the construction machinery industry has been negatively affected.
Fully implement the high-quality development concept of "three high and one can" and continuously improve the net profit. The company fully implements the new concept of "three high and one can" high-quality development with high quality, high efficiency, high efficiency and sustainability, practically enhances the awareness of quality control, improves the ability of technological innovation, improves the level of internal management, actively distributes overseas markets, comprehensively promotes the transformation and upgrading of enterprises, and continuously improves the competitiveness of XCMG products and brand influence.
Mixed reform and employee stock ownership have helped enterprises improve their operating efficiency and profitability. In September 2020, XCMG's mixed reform plan was implemented, introducing institutional investors and employee stock ownership, and the vitality of the enterprise continued to improve. Since the end of the third quarter of 2020, the company's net profit margin has increased from 4.75% to 7.14% in the first half of 2021. Although the net interest rate fell in the third quarter of 2021 due to the rise of upstream raw material prices and other factors, it remained at the level of 6.6%. We expect that the net profit margin of the company will return to more than 7% in 2022, and the net profit margin is expected to continue to improve in the long term.
Absorb and merge XCMG Co., Ltd. and inject new assets to further enhance the core competitiveness of the enterprise. On September 30, 2021, the company announced that it planned to issue shares to the shareholders of XCMG to absorb and merge XCMG. After the completion of the transaction, XCMG's excavator, concrete machinery, tower crane and other assets will be injected into the listed company as a whole. Given that XCMG's mining machinery, tower crane, concrete machinery and other businesses are at the forefront of China and the world, and have high gross profit margin, it is expected that the company's overall profitability will continue to improve and its core competitiveness will continue to improve.
The landing of special bonds will help the recovery of infrastructure, and the leader of construction machinery is expected to usher in marginal improvement. In 2021, the construction machinery industry as a whole experienced a trend of high before low, but special bonds were issued intensively in the fourth quarter. It is expected that infrastructure investment will be significantly large in the first quarter of 2022. In addition, the Ministry of Finance issued a new special debt limit of 1.46 trillion in 2022 in advance at the end of 2021. Although the downward trend of the industry has not been reversed yet, the availability of funds will help the gradual recovery of infrastructure, and the leader of construction machinery is expected to usher in marginal improvement.
Investment suggestion: it is estimated that the company will realize an operating income of 86.96/95.77/109.25 billion yuan and a net profit attributable to the parent company of 5.83/73/8.89 billion yuan in 21-23 years, corresponding to 8 / 6 / 5 times of PE. Considering the implementation of the company's mixed reform, the business vitality and corporate profitability are expected to continue to improve, and the "recommended" rating is maintained.
Risk tips: macroeconomic downside risk, market competition risk, supply chain security risk, raw material price risk, exchange rate fluctuation risk
