\u3000\u3 China Vanke Co.Ltd(000002) 430 Hangzhou Oxygen Plant Group Co.Ltd(002430) )
Company events: the company released the annual report of 2021. 1) the annual revenue of 2021 was RMB 11.878 billion, with a year-on-year increase of 18.53%; The net profit attributable to the parent company was 1.194 billion yuan, a year-on-year increase of 41.60%; 2) From the fourth quarter alone, the company achieved a revenue of 2.916 billion yuan (a year-on-year increase of 4.32% / a month on month decrease of 12.83%); The net profit attributable to the parent company was 147 million yuan (a year-on-year decrease of 25.41% / a month on month decrease of 12.83%).
Both gas and equipment businesses achieved year-on-year growth. The company’s revenue and net profit attributable to the parent company increased significantly in 2021, mainly benefiting from the double growth of revenue and profit of gas business and air separation equipment business. Among them, 1) gas business achieved a revenue of 6.616 billion yuan in 2021, with a year-on-year increase of 22.05%, reaching the highest level of sales in history; In terms of gross profit margin, with the continuous production of some gas projects and the continuous expansion of retail gas, the gross profit margin of gas sales in 2021 was 26.17%, an increase of 3.90pct year-on-year, reaching the highest level in history; 2) Air separation equipment business achieved a revenue of 4.315 billion yuan in 2021, a year-on-year increase of 5.51%; In terms of gross profit margin, the company gives full play to the scale advantage of equipment production. Under the background of the sharp rise in the price of raw materials, the gross profit margin will reach 24.03% in 2021, which is still 0.24 percentage points higher than that in 2020. In addition, due to the obvious growth of product sales, the company’s net cash flow from operating activities increased by 34.57% year-on-year. With the continuous expansion of gas and equipment sales business, the company’s operating cash flow is expected to be further optimized.
The diversified layout of gas projects drives the innovative development of the company. The company’s gas business is derived on the basis of air separation equipment and gives full play to its own advantages. In 2021, the company signed several new gas supply projects such as Yukun iron and steel, Yulong petrochemical and Hubei Jinkong, and the new oxygen production scale of gas investment is about 640000 m3 / h; In addition, since 2022, the company has announced four air separation equipment projects, covering steel, non-ferrous metal smelting, lithium battery materials and other fields, and the project layout has been diversified. Specifically, it includes Jinnan iron and steel new material gas project (a new 60000m3 / h air separation unit), Jiyuan Hangzhou oxygen wanyang gas phase II project (a new 10000m3 / h air separation unit), Quzhou Hangzhou oxygen Huayou gas project (a new 30000m3 / h and a 50000m3 / h air separation unit), Jiujiang Hangzhou oxygen Tianci gas project (a new 40000m3 / h air separation unit), etc. The above projects will be launched successively in 2023 to form an effective support for the continuous growth of the company’s future performance.
Under the background of “double carbon” policy objectives, equipment sales ushered in new development opportunities. 2021 is the first year of China’s “double carbon” policy, and the client’s demand for the transformation of new technological processes has increased significantly, thus promoting the rapid growth of the demand for large complete sets of air separation equipment. With the further refinement and implementation of local policies, the company actively grasped the market opportunities and signed new air separation equipment contracts of 6.24 billion yuan and petrochemical equipment of 600 million yuan in 2021.
Investment suggestion: in the context of the “double carbon” policy goal, the company’s air separation equipment and professional gas services will continue to maintain high growth. We expect the company to achieve revenue of RMB 13.116/15.103/17.542 billion and net profit attributable to the parent company of RMB 1.330/15.93/2.003 billion from 2022 to 2024, with a year-on-year increase of 11.4%, 19.8% and 25.7%. The current share price corresponding to PE is 22 times, 18 times and 14 times respectively, maintaining the “recommended” rating.
Risk tips: the price of raw materials fluctuates, the downstream demand is less than expected, and the epidemic situation in China is repeated.
