\u3000\u3 China Vanke Co.Ltd(000002) 372 Zhejiang Weixing New Building Materials Co.Ltd(002372) )
The revenue performance is beautiful and the profit performance is in line with expectations
Recently, the company released its 2021 performance express, which is expected to achieve a revenue of 6.388 billion yuan, a year-on-year increase of 25.1%, a net profit attributable to the parent of 1.234 billion yuan, a year-on-year increase of 3.5%, and a net profit attributable to the parent of 1.202 billion yuan, a year-on-year increase of 4.8%. According to this calculation, the company's 21q4 achieved a revenue of 2.361 billion yuan, a year-on-year increase of + 25.3%, an increase of 52.9% over 19q4, a net profit attributable to the parent of 461 million yuan, a year-on-year increase of + 0.6%, an increase of 58.6% over 19q4, and a net profit attributable to the parent of 458 million yuan after deduction, a year-on-year increase of + 3.5%, an increase of 62.1% over 19q4.
Revenue performance exceeded expectations. The company's revenue increased by 25.3% year-on-year in the fourth quarter and 15.8% in the third quarter. On the basis of the high base in the second half of 2020, the revenue performance is beautiful. We think there are three reasons: first, the benefit market share is increased, the C-end environment is improved, and the retail proportion is increased. The company accelerates the sinking of channels and covers the blank market, and the sales volume is expected to grow rapidly. At the same time, in the first half of 2021 In 2020, the proportion of retail and engineering business income was 70%: 30% and 62%: 38% respectively. The decline of Engineering proportion was mainly due to the decline of hardcover and the tightening of real estate funds, and the difficulty of engineering business; Second, the expansion of new products has achieved remarkable results. In the first half of the year, the waterproof + water purification business increased by about 90% and 80% respectively. We expect to continue the high growth throughout the year with the vigorous cultivation of the company. Third, benefit from price increase. In the first half of 2021, the company raised the price of a full range of products, and PVC products raised the price once in the first half and the second half of the year (cost plus). In addition, the revenue of municipal engineering is expected to pick up in the fourth quarter.
The profit growth rate is lower than the income. We suggest that after adding back the interference of investment income and incentive expenses, the year-on-year growth rate is about 15%, which is better than expected. The fair value of the enterprise invested by Ningbo Dongpeng Heli, the fund invested by the company, decreased at the end of the period compared with the beginning of the period, the corresponding investment income decreased by 94.723 million yuan, and the amortization of restricted stock incentive expenses in the current period increased by 75.998 million yuan. Compared with the net profit attributable to the parent company of 1.19 billion in 2020, after the interference of investment income and incentive expenses is added back (tax deduction still needs to be considered), the scale of net profit attributable to the parent company in 2021 is slightly less than 1.4 billion, with a year-on-year increase of about 15%. However, it is undeniable that the pressure of price rise of raw materials has increased significantly year-on-year, and the company's gross profit margin has decreased year-on-year. In addition, the annual income tax rate was pushed back to about 14%, slightly higher than that in 2020 (13.66% in 2020).
The core asset of "consumer building materials" is scarce, and the concentric circle is growing again
Consumption attribute smoothing cycle influence. According to the quarterly cumulative caliber, the correlation coefficient between Weixing's income growth and the completed area and residential sales area is between 0.4-0.5. The downstream is dominated by rigid demand. The compound growth rate of the company's income and net profit attributable to the parent company in the past 10 years is 15% and 21% respectively, significantly crossing the cycle. Based on the pain point, products + services play the role of "insurance", the owner is "afraid" of water leakage loss, and the channel is "afraid" of water leakage compensation. The company is well aware of the psychology of customers. Promote the "concentric circle" to a strategic height, officially launch the "cafe" waterproof in June 2017, pilot the pre filter product in 2016, and launch the water purifier in March 2021. Waterproof implements the mode of "product + construction" and "product + acceptance" to lay the foundation for differentiation. At the same time, carry out system integration + service and continuously upgrade the business model.
Investment suggestion: we estimate that the net profit attributable to the parent company from 2021 to 2023 will be 1.234 billion yuan, 1.604 billion yuan and 1.924 billion yuan respectively, and the corresponding dynamic PE will be 28x, 22x and 18x respectively. Maintain a "recommended" rating.
Risk warning: macroeconomic downside risk; Risk of price fluctuation of raw materials; Engineering risk receivable.
