\u3000\u3 China Vanke Co.Ltd(000002) 611 Guangdong Dongfang Precision Science & Technology Co.Ltd(002611) )
Event: on the evening of March 14, the company released its 2021 annual report.
The performance is in line with expectations. In 2021, the net profit attributable to the parent company after deducting non profits increased by 45% year-on-year; Profitability increased steadily
In 2021, the company achieved a total operating revenue of 3.525 billion yuan, a year-on-year increase of 21%; The net profit attributable to the parent company was 467 million yuan, a year-on-year increase of 20%; The net profit attributable to the parent company after deduction was 381 million yuan, an increase of 45% year-on-year. The gross profit margin / net profit margin of sales were 27.51% / 14% respectively, down 0.5pct/0.35pct compared with 2020. In Q4, the net profit attributable to the parent company after deduction of non-profit was about 100 million yuan in a single quarter, with a year-on-year increase of 3.5%. Since the company refocused its main business in 2020, its profitability has increased steadily, and the overall performance in 2021 is in line with expectations.
The main business revenue continued to grow steadily; Fosber Asia’s profitability is expected to improve again
In 2021, the company’s main business intelligent packaging equipment revenue was about 3.06 billion yuan, accounting for 87% of the total revenue. The main business can be divided into corrugated board production line and carton printing and packaging production line, accounting for 72% and 15% of the total revenue respectively. The revenue of the corrugated board production line of the company mainly comes from fosber group. The revenue CAGR from 2018 to 2021 was about 16%, which increased steadily. Fosber Asia is mainly oriented to China and Southeast Asian markets, with a revenue CAGR of about 88% from 2017 to 2020. In 2021, the company increased its shareholding in fosber Asia (the current shareholding ratio is about 89.2%). With the capacity expansion of the Asian line in 2022 and the general trend of high-end corrugated board line, fosber Asia’s profitability is expected to be improved.
Spin off Yum power to be listed on the gem and focus on the main business; The overall profitability of the company is expected to improve
The company’s aquatic power products (outboard machines) are mainly in the charge of its subsidiary Yum! Power. In 2021, the company’s business revenue was about 460 million yuan, a year-on-year increase of + 36%, accounting for about 13% of the total revenue. On the evening of March 14, the company released the plan for the spin off of Yum power to the gem listing. At present, the company controls 75% of the equity of Yum power in total. On the one hand, the spin off and listing will further straighten out the main business of the parent company, on the other hand, it will improve the investment and financing ability of Yum power and contribute to the improvement of the overall profitability of the company.
Digital intelligence replaces the old production line + extended digital printing field, and the growth ceiling of the company is expected to continue to open
The corrugated packaging industry is developing in the direction of digital intelligence. It is expected that 6000 old stock production lines in China will be replaced by high-end production lines with a higher degree of intelligence in the next 5-10 years. The company has been deeply engaged in the corrugated packaging equipment industry for nearly 30 years. In 2020, Dongfang Hezhi was established to accelerate the intelligent construction of the industrial chain; In 2022, the company expanded its capital and acquired Wande to enter the field of digital printing. The growth space will be further opened, and the growth ceiling is expected to break through from 30-40 billion to 100 billion.
Profit forecast
It is estimated that the company’s revenue from 2022 to 2024 will be 4.2/5/5.9 billion yuan respectively, with a year-on-year increase of 20% / 20% / 18%; The net profit attributable to the parent company was 544 / 657 / 764 million yuan respectively, with a year-on-year increase of 16% / 21% / 16%, corresponding to PE11 / 9 / 8x. As the equipment leader in the corrugated packaging industry, the company is expected to continue to benefit from the intelligent replacement of production line and maintain the “buy” rating.
Risk tips
1) fosber Asia’s profitability is lower than expected; 2) The epidemic affects the offline installation and commissioning
