\u3000\u3 Guocheng Mining Co.Ltd(000688) 009 China Railway Signal & Communication Corporation Limited(688009) )
The net profit attributable to the parent decreased, the business structure was optimized, and the gross profit margin increased slightly
China Railway Signal & Communication Corporation Limited(688009) released the annual report of 2021, and achieved an annual revenue of 38.36 billion yuan, a year-on-year decrease of 4.4%; The net profit attributable to the parent company was 3.27 billion yuan, a year-on-year decrease of 14.3% (excluding the increase of R & D expenses, the increase of labor costs caused by the cancellation of social security relief by the state and the income from the disposal of large assets, the net profit in 2021 was basically the same as that of the previous year). The company’s net operating cash inflow was 2.77 billion yuan, a year-on-year decrease of 7.9%. The gross profit margin of the company was 22.2%, with a year-on-year increase of 0.1 percentage points, mainly due to the adjustment and optimization of the company’s business structure and the decline in the proportion of EPC business income with low gross profit margin; The net interest rate was 9.6%, down 1.0 percentage points year-on-year.
In the past 21 years, the business was affected by multiple factors, and the full order guarantee continued to grow
In 2021, the company achieved revenue of 18.61/83.6/10.21 billion respectively from railway / urban rail / general contracting, with a year-on-year decrease of 3.6% / 1.3% / 10.2% respectively. The decline of the company’s income is mainly due to the reduction of railway investment by the state, the lag of project bid opening, the increase of equipment and raw material costs and R & D expenses caused by the rise of bulk commodity prices. The company actively responded to the impact of adverse factors. In 2021, the total amount of newly signed contracts was 72.28 billion yuan, a year-on-year increase of 1.2%; Among them, the newly signed contracts in the railway sector amounted to 23.73 billion yuan, a year-on-year decrease of 9.6%; The newly signed contracts in the field of urban rail transit reached 13.33 billion yuan, an increase of 2.0% year-on-year; The newly signed contracts in overseas fields amounted to 2.2 billion yuan, a year-on-year increase of 47.6%; New contracts signed in general contracting and other fields amounted to 33.02 billion yuan, a year-on-year increase of 7.8%. By the end of 2021, the company’s orders on hand totaled 146.3 billion yuan, which was at an all-time high, ensuring the continuous growth of future performance.
Actively layout overseas business and ensure business growth
In 2021, the company’s overseas business revenue was 1.1 billion yuan, with a year-on-year increase of 20.7%, mainly due to the company’s active promotion of the progress of overseas projects such as Hungary Serbia railway and Egypt Ramadan 10th city light rail project phase I, and the revenue recognition increased significantly compared with the previous year. The company made great efforts to overcome the impact of the epidemic, actively arranged in the overseas market, contracted the projects of the old Nuo section and Nuo Su section of Hungary Serbia railway, and became the first Chinese high-speed railway in Europe; Undertake metro projects in Mexico and expand new regional markets. The company relies on one belt, one road, the key areas and countries along the way, and makes two-way efforts in the existing market and new market. The level of overseas business contract is continuously improved, providing protection for business growth.
Maintain “buy” rating
In 2022, the investment of urban rail transit is still good, but the investment of national railway is still uncertain due to the impact of the epidemic. We then lowered the company’s net profit forecast for 22-23 years by 21.8% / 22.6% to 3.52/3.79 billion yuan, and introduced a 24-year net profit forecast of 4.09 billion yuan, corresponding to EPS of 0.33/0.36/0.39 yuan for 22-24 years respectively. The company’s operating performance is stable and full of orders, maintaining the “buy” rating of A-Shares and H shares.
Risk tips: the risk of intensified industry competition, the risk of downstream prosperity, and the risk of ineffective control of overseas epidemic
