\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 67 Quakesafe Technologies Co.Ltd(300767) )
Event: Quakesafe Technologies Co.Ltd(300767) recently released an annual report: in 2021, the company achieved an operating revenue of 67032700 yuan, an increase of 898361 million yuan, a year-on-year increase of 15.48%, a net profit of 874649 million yuan, a decrease of 732517 million yuan, a year-on-year decrease of 45.58%, and a deduction of non net profit of 803637 million yuan, a year-on-year decrease of 40.87%. Based on 202170726 shares of the company’s total share capital as of December 31, 2021, it is proposed to distribute cash dividends of 0.9 yuan (including tax) for every 10 shares, totaling 1819536534 yuan (including tax), and increase 2 shares for every 10 shares to all shareholders with capital reserve.
Comments:
Revenue increased steadily in 2021, with Q4 significantly improved. The revenue growth of the company in 2021 was 15.48%, which was relatively stable. Among them, the income of Yunnan Province decreased by 11212000450 yuan over the previous year, a year-on-year decrease of 25.38%, and the income outside Yunnan Province increased by 19164710777 yuan over the previous year, an increase of 23.86%. Mainly due to the company’s continuous commitment to market expansion outside the province in 2019 and the temporary stagnation of some projects. According to the impact of the company’s historical income fluctuation, we believe that under the current small-scale situation, the impact of large projects on income fluctuates greatly. Since 2019, the company has strengthened its efforts to explore the market outside the province. In 2020, there are large projects such as Urumqi airport reconstruction and expansion project and Tangshan LNG. The fluctuation of income and in 2021 is within the normal range. In terms of Q4 revenue, the revenue reached 210 million, with a growth rate of 60.26%, which has been greatly improved compared with q1-q3, or brought about by the continuous expansion of operation and expansion outside the province.
The pre impact of expenses in the stage of power storage + impairment, loss of subsidiaries, etc. comprehensively lead to the pressure on the net profit in 2021. 1) Zhenan design and Xinjiang Zhenan are at the break even point, and the other three subsidiaries are at a loss. Changzhou green affected the performance of -426971446 yuan; 2) In 2021, raw materials rose sharply. The maximum price of rebar exceeded 5900 yuan, and the average price exceeded 5000 yuan, with a year-on-year increase of 33.5%. The cost of steel raw materials accounted for more than 70%, which had a great impact under the background of steel price rise; 3) The increase of accounts receivable for more than one year led to an increase in impairment loss year-on-year. In the credit impairment loss in 2021, the bad debt loss of accounts receivable was -2165710584 yuan, an increase of more than 152% compared with -859210076 yuan in 2020; 4) In order to cope with the market expansion brought about by legislation, the company increased its sales and management expenses, with a 20.7% increase in sales expenses, mainly due to the significant increase in marketing expenses, business entertainment expenses, travel expenses, office expenses / vehicle expenses, etc., and the 45.34% increase in management expenses, mainly due to the increase in management personnel and the increase in management expenses caused by the capital increase of Changzhou green this year. In addition, the financial expenses increased by 171.49%, Mainly due to the increase of short-term loan interest and convertible bond interest. 5) The substantial increase of 51.08% in R & D investment is mainly due to the continuous increase in R & D investment in R & D projects such as the performance improvement of isolation products and product monitoring system, the performance optimization project of original damping products and the development project of new damping products; 6) Last year, it received 16 million yuan of listing subsidy from the economic and Trade Development Bureau of Kunming Airport Economic Zone of Yunnan Province and 2 million yuan of supporting funds for listed enterprises in Kunming in 2020 from the economic and Trade Development Bureau of Kunming Airport Economic Zone, resulting in a decrease in non operating income this year compared with the previous year.
The trial production in Tangshan is smooth, and the expansion of the company significantly confirms the expansion trend. The fixed assets at the end of the year were 28465068250 yuan, a significant increase over 12979105448 yuan at the beginning of the year, mainly due to the conversion of projects under construction into fixed assets. According to the annual report, the progress of the new intelligent shock absorption and isolation products equipment manufacturing base project (Tangshan) is 59.2%, and the progress of the new intelligent shock absorption and isolation products equipment manufacturing base project (Kunming) is 46.85%. Among them, Tangshan base is progressing smoothly. At present, it has entered the trial production stage. Due to the special terrain and epidemic situation in Karst Hilly Areas, Kunming base is planned to be completed and put into operation on April 30, 2022. At the end of the annual report, the company had 917 in-service employees, with a year-on-year increase of more than 75%, of which the number of sales personnel increased from 97 to 167, the number of technical personnel increased from 133 to 233, and the number of production personnel increased from 233 to 376. The company’s significant expansion highlights its expansion preparation trend. With the opening of the company’s national layout, the benefits of large-scale operation in various places may appear.
Anti regulation, fortification classification, technical guidelines and shock absorption standards were intensively solicited for opinions to escort the implementation of the regulations. Since the implementation of the regulations on seismic management of construction projects in September 2021, the application of seismic reduction and isolation technology in “two zones” and “eight categories” buildings has become a mandatory requirement under legal constraints. Considering that the design cycle of buildings is about one year, it is now at a critical moment on the eve of the release of seismic reduction and isolation orders. Recently, several drafts of national and industrial standards have been publicized for comments, including code for seismic design of buildings, classification standard for seismic fortification of building engineering, building energy dissipation damper and seismic technical guidelines based on maintaining the normal use function of buildings, so that the application of seismic reduction and isolation technology in the design scheme has evidence and scheme to be found, so as to further lay the foundation for the normative development of the industry.
Profit forecast and investment rating: since the implementation of the regulations on the administration of earthquake resistance of construction projects in September 2021, with the continuous solicitation of opinions from many local organizations to study the regulations and standard documents, the certainty of industry development has been strengthened. It is expected that this year will be the first year of legislative expansion. As a leading enterprise in the industry, the company has been expanding its staff, production and layout in advance for a long time. It is expected to usher in large-scale production in the second half of this year. At the same time, in the long run, China State Construction Engineering Corporation Limited(601668) safety reserve has the trend of continuous improvement. In recent years, the Ministry of housing and urban rural development has gradually investigated the potential safety hazards of buildings across the country. As one of the important safety assessment indicators, the importance of building seismic performance has been continuously improved. As the technology with the best seismic effect of buildings at present, the long-term improvement trend of permeability is determined. It is estimated that the company will realize a net profit attributable to the parent company of RMB 380, 790 and 1.35 billion from 2022 to 2024, with corresponding EPS of RMB 187, 391 and 6.7 respectively, and corresponding PE of current stock price of 35.9/17.2/10.0x respectively.
Risk factors: infrastructure investment has been significantly reduced, raw materials have risen sharply, market competition has intensified, and the implementation of the regulations on the administration of earthquake resistance of construction projects has not been as expected.
