\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 970 Sinoma International Engineering Co.Ltd(600970) )
Revenue performance grew steadily, in line with expectations, and epidemic prevention costs dragged down performance. The company announced that it would achieve an operating revenue of 36.2 billion yuan in 2021, with a year-on-year increase of 18.68%; The net profit attributable to the parent company was about 1.81 billion yuan, with a year-on-year increase of 18.99%. Revenue and performance grew steadily, in the performance forecast range previously announced, in line with expectations. According to the announcement, the company’s anti epidemic expenditure in 2021 is 670 million yuan. If it is added back at the income tax rate of 25%, it is estimated that the net profit attributable to the parent company will be 2.31 billion yuan in 2021, an increase of 9% compared with 2019 before the epidemic. According to the annual report, Sinoma mine / Nanjing Kaisheng / Beijing Kaisheng injected by asset restructuring realized an operating revenue of 5.21/19.4/1.06 billion yuan and a net profit of 4.3/1.8 / – 36 million yuan respectively. After deducting the three newly injected assets, the company’s original main business realized an operating revenue of 27.99 billion yuan, a year-on-year increase of 24.4%; The net profit was 1.46 billion yuan, a year-on-year increase of 30.5%.
The optimization of business structure promoted the increase of gross profit margin, and the cash flow continued to be excellent. According to the adjusted statement, the company’s annual comprehensive gross profit margin was 17.06%, up 0.44 PCT year-on-year, which is expected to be mainly due to the increase in the proportion of high gross profit businesses such as equipment manufacturing and mine operation and maintenance. By business, the gross profit margin of engineering construction / equipment manufacturing / environmental protection / production and operation business was 13.4% / 23.0% / 22.6% / 19.3% respectively, with a year-on-year change of -0.84 / + 2.27 / + 5.40 / + 3.30 PCT. During the period, the expense rate was 10.23%, with a year-on-year increase of 1.23 PCT, of which the sales / management / R & D / financial expense rate was -0.21 / + 0.04 / + 0.35 / + 1.04 PCT respectively year-on-year. The decrease of sales expense rate is expected to be mainly due to the change of accounting standards, and the transportation handling fee is changed to the cost accounting of main business; The increase in R & D expense rate was mainly due to the company’s increase in the R & D of cement low-carbon technology, and the annual R & D expense increased significantly by 33% year-on-year; The increase of financial expense rate is mainly due to 1) the increase of exchange loss this year caused by the appreciation of RMB; 2) The decrease of long-term receivables leads to the decrease of unrealized financing income recognized in this year. The net interest rate attributable to the parent company was 4.99%, basically the same as last year. The annual net operating cash flow of the company was 2.214 billion yuan, compared with 2.193 billion yuan in the same period last year, and the cash flow performance continued to be excellent.
New orders increased steadily, and the green and intelligent business of cement production line was solidly promoted. The company announced that the newly signed contracts in 2021 were 50.98 billion yuan, with a year-on-year increase of 18%. By product, the newly signed orders for engineering construction / equipment manufacturing / environmental protection / production operation / others were 366.9/48.1/15.1/63.6/1.6 billion yuan, with a year-on-year increase of 20% / 16% / – 31% / 24% / 41% respectively. Geographically, the newly signed contracts at home and abroad were 27.57 billion yuan and 23.41 billion yuan respectively, with a year-on-year increase of 28% / 8%. The company continued to solidly promote the green and intelligent business of cement production line. By the end of 2021, the company had completed 122 intelligent cement plant projects, including 25 new intelligent plants and 97 intelligent plants.
The production, operation and maintenance business continued to make breakthroughs, and the localized operation and localization operation continued to deepen. With the injection of Sinoma mine, the operation and maintenance business of the company has made a significant breakthrough, with the newly signed contract amount of 6.36 billion yuan, accounting for 12.5% of the total contract, including 5.577 billion yuan of mine service contract amount and 482 million tons of ore supply, with a year-on-year increase of 19.9%. The company’s annual report disclosed that the 14th five year plan will accelerate the digital transformation and strive to promote the transformation of the company to high-end technology equipment manufacturer and production, operation and maintenance comprehensive service provider. In terms of localized operation, the operating revenue was 2.999 billion yuan, a year-on-year increase of 98.04%; The gross profit was 268 million yuan, a year-on-year increase of 3.1 times. The company and enterprises within China Building Materials Group have jointly arranged globalization. Projects such as battery diaphragm in Vietnam and calcium silicate board in Nigeria have been put into operation one after another. The construction of aggregate and other projects in Nigeria has been promoted on schedule, and investment projects such as gypsum board in Thailand and wind power blades in Brazil are about to be implemented. Localized operation is expected to contribute n profit platforms to the company in the future and become a new growth highlight of the 14th five year plan.
Investment suggestion: we expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 2.25/26.0/3.01 billion respectively, with a year-on-year increase of 25% / 15% / 16%, EPS of RMB 1.02/1.17/1.36 respectively, and the current share price corresponding to PE of 9 / 8 / 7 times respectively, maintaining the “buy” rating.
Risk tips: risks of policy changes related to carbon neutralization, failure of green intelligent transformation to meet expectations, and repeated overseas epidemics.
