\u3000\u3 Shengda Resources Co.Ltd(000603) 018 China Design Group Co.Ltd(603018) )
Q4 revenue performance has recovered significantly, and there is sufficient confidence in steady growth in 2022. The company achieved a revenue of 5.82 billion yuan in 2021, an increase of 9% at the same time; The net profit attributable to the parent company was 620 million yuan, an increase of 6% at the same time, in line with expectations. The new business volume of the whole year was 10.69 billion yuan, an increase of 4% at the same time, maintaining the scale of 10 billion yuan for two consecutive years. In terms of business, the revenue of survey and design business / EPC business was RMB 5.09 billion / 700 million respectively, with an increase of 7% / 20% at the same time. The newly signed single amount of survey and design was 7.2 billion yuan, an increase of 2% at the same time, of which the contract amount of key customers accounted for more than 60%, and the stickiness of high-quality customers was strong. Digital intelligence / green low-carbon new businesses achieved revenue of RMB 390 million / 550 million respectively, a total of RMB 940 million, an increase of more than 20% at the same time. Quarterly, q1-4 company’s single quarter revenue changed by 40% / – 6% / – 13% / 20% year-on-year respectively; The net profit attributable to the parent company in a single quarter has changed by 34% / – 7% / – 27% / 22% year-on-year respectively. Q4 revenue and performance have significantly accelerated compared with Q3. It is expected that it is mainly due to the delayed recognition of income of some projects in the second and third quarters due to epidemic conditions in the province, and Q4 settlement is relatively concentrated. In terms of subregions, the revenue within / outside the province was RMB 3.60/2.19 billion respectively, an increase of 8% / 9% at the same time. In 2021, the company participated in more than 10 provincial transportation “14th five year plan” in Jiangsu, Guangdong, Henan and Hebei. More than 50% of the survey and design projects outside the province were driven by the planning business, and the traction of the planning continued to increase. There are seven regions with orders exceeding 100 million yuan outside Jiangsu Province: Guangdong (more than 400 million), Shandong and Henan (more than 200 million), Fujian, Guangxi, Sichuan and Yunnan (more than 100 million). The regional development is progressing smoothly. The total amount of design contracts in the Yangtze River Delta was 4.59 billion yuan, an increase of 14% at the same time. In 2022, the company plans to increase the new business volume and revenue by 10-30% and the performance and operating receipts by 10-20%, with sufficient confidence in steady growth. The company’s total dividend + repurchase in 2021 is about 190 million yuan, accounting for 30% of the net profit attributable to the parent company.
As a result of EPC and new business development, the gross profit margin decreased and the cash flow remained stable. In 2021, the company’s gross profit margin was 31.9%, yoy-1.1 PCT, and the decline is expected to be mainly due to the accelerated development of EPC business with lower gross profit margin than the traditional main business and new businesses such as digital intelligence and green low carbon. Among them, the gross profit margin of EPC business has reached 21.8%, yoy + 7.3 PCT, indicating that the company’s EPC related project capacity is becoming more and more mature. During the period, the expense rate was 14.9%, yoy-0.1 PCT, of which the sales / management / R & D / financial expense rate was yoy-0.2 / – 0.1 / + 0.2 / 0.0 PCT, which remained stable as a whole. The increase in R & D expense rate is expected to be mainly due to the increase in R & D investment in new businesses such as digital design and smart construction. The impairment loss of assets (including credit) is about 15.28 million yuan less. Income tax rate yoy + 0.4 PCT. The net interest rate attributable to the parent company is 10.62%, yoy-0.27 PCT. The net cash inflow from operating activities was 390 million yuan, basically the same as that of the previous year. The cash to cash ratio and cash to pay ratio were 85% and 56% respectively, which was basically the same as that of the previous year, and the overall performance of cash flow was stable.
The development of new businesses such as intelligence, digitization and industrialization has been accelerated, and the transformation results have been continuously highlighted. In 2021, the company further promoted the transformation and upgrading, made project level or product level breakthroughs in the fields of intelligence and digitization, and developed to the industrial level. Among them: 1) digital design: in 2021, the contract value of the project led by BIM + GIS technology was about 260 million yuan, and the contract value of the project with BIM + GIS system as the production platform was about 670 million yuan; The self-developed eicad system has fully realized SaaS, and the average annual revenue growth rate has maintained 100% in recent three years. 2) Industrial Construction: Huashi Yancheng MES + Digital twin factory has been completed and achieved mass production. It has provided prefabricated bridge components for the reconstruction and expansion project of Beijing Shanghai Expressway, Jianxing Expressway and the north extension of Xingchuang road in Yancheng, with a cumulative output of nearly 70000 m3 of concrete and a revenue of 200 million yuan. 3) Smart transportation: integrated solutions and related products have been formed around smart roads, smart water transportation, smart ports, smart cities and other fields, and have entered the promotion and application period. 4) Environmental protection and low-carbon business: the scale of environmental protection and low-carbon business has expanded rapidly. In the field of ecological treatment, new orders for water transportation and water conservancy have been signed for 1 billion yuan in the whole year, and nearly 3 billion yuan of sewage treatment projects have been undertaken in the past two years; In the green and low-carbon field, we will actively promote the low-carbon business of transportation, and will continue to expand the fields of zero carbon facilities, low-carbon materials, carbon monitoring and so on.
Investment suggestion: we predict that the net profit attributable to the parent company in 20222024 will be 7.1/8.2/940 billion yuan, EPS will be 1.04/1.20/1.37 yuan (CAGR in 20212024 is 15%), and the corresponding PE of the current stock price will be 7.8/6.8/5.9 times, maintaining the “buy” rating.
Risk warning: the risk of decline in the growth rate of transportation infrastructure investment, the risk of bad debts of accounts receivable, and the risk that the development of new businesses such as digital and industrial construction is less than expected.
