\u3000\u3 China Vanke Co.Ltd(000002) 372 Zhejiang Weixing New Building Materials Co.Ltd(002372) )
Event overview. The company issued the annual report of 2021. In 2021, the company achieved a revenue of 6.388 billion yuan, a year-on-year increase of + 25.13%, and a net profit attributable to the parent company of 1.223 billion yuan, a year-on-year increase of + 2.58%; The corresponding Q4 revenue was 2.36 billion yuan, a year-on-year increase of + 25.3%, and the net profit attributable to the parent company was 451 million yuan, a year-on-year increase of - 1.67%. The company announced that the operating revenue target of 2022 was 7.35 billion yuan, a year-on-year increase of + 15%, and the cost was controlled at about 5.7 billion yuan.
The growth of sales volume shows the resilience of channels, and the pressure on raw material costs drags down the growth of profits. The company's performance is slightly lower than the previous performance express. In 2021, facing the downward pressure of real estate, actively explore channels, accelerate the sinking of channels and the penetration of marketing outlets, and improve the market share. The market sales in western, central and South China increased by more than 30% year-on-year, so as to maintain a stable growth of revenue. Among them, the revenue of Q4 company with high real estate pressure remained at a high level of 25.3%, reflecting the resilience of the channel. According to the data disclosed in the annual report, in 2021, the company's pipe sales volume was 298000 tons, with a year-on-year increase of + 12.3%, and the selling price was 19530 yuan / ton, with a year-on-year increase of + 1500 yuan / ton. Due to the rising cost and the rapid growth of PVC pipe sales with low gross profit, the gross profit margin of the pipe business decreased by 3.6 percentage points to 40.6% year-on-year, which is the main reason why the profit growth of the company is slower than the income. In addition, the year-on-year increase in the company's investment losses and incentive expenses also diluted the company's profits.
Strong retail performance.
From the perspective of sub channels, the revenue of PPR pipes, which can better represent the retail channel, increased by 27.6% year-on-year in 2021, and the gross profit margin decreased slightly by 1 percentage point to 55.2% year-on-year, which remained high. It is judged that in 2021, benefiting from the company's channel expansion, the retail sales volume increased steadily, and the company raised the price of products, making the gross profit margin stable on the whole. Under the background of a large increase in the price of raw materials in 2021, the gross profit margin of PPR pipes of the company is generally stable, reflecting the strong channel bargaining ability of the company under the operation of products + services. The revenue of PE pipes that can better represent the channels of municipal engineering increased by 5.8% year-on-year, which is relatively weak in the sub categories, and the gross profit margin decreased by 4.5 percentage points year-on-year to 31.3%. According to the company's annual report, in 2021, due to the withdrawal of some national support policies for infrastructure investment and the debt risk constraints of local governments, the investment in some infrastructure projects slowed down. We judge that the weak demand for municipal engineering is the reason for the low income of PE pipes. We judged that the company also raised the price of PE pipes, but failed to fully transmit the cost due to the weak overall demand. The revenue of PVC pipes, which can better represent the real estate engineering channels, increased by 38.4% year-on-year, but the gross profit margin decreased by 11.2 percentage points year-on-year to 11.9%. We judge that the main factor for the growth of PVC pipe sales of the company is the growth of supporting sales. Although the company also raised the price of PVC products, the price rise of PVC in 2021 was significantly higher than that of PE and PPR, and the speed was faster (Q4 increased by 50% in a single quarter), so the price rise of the company lagged behind, Therefore, the gross profit margin declined significantly.
2022 may benefit from steady growth and the recovery of gross profit margin, which is optimistic about growth. According to wind data, at present, PPR, PVC and PE prices are lower than the high point in 2021. If the geographical conflict eases and the possibility of sharp rise in relevant prices is limited, it is judged that the company's gross profit margin is expected to rise in 2022. In addition, since 2021q4, the state has relaxed the restrictions on residential house purchase loans, and the second-hand housing transaction is expected to gradually pick up, further supporting the growth rate of retail end. Recently, the state has stressed several times to accelerate water conservancy investment in 2022. Therefore, the municipal engineering end with relatively weak performance of the company in 2021 is expected to gradually recover. We judge that after the epidemic control, the relevant demand will be released gradually, and the company's revenue growth target of 15% in 2022 also reflects the confidence in channel expansion and demand recovery to a certain extent.
Investment advice
Considering that the price adjustment and raw material cost of the company will increase greatly in 2021, and the price and cost assumptions will be raised at the same time, the revenue forecast for 20222023 will be raised to RMB 7.39/8.44 billion (Original: RMB 7.08/8.07 billion), and the forecast of net profit attributable to the parent company (RMB 1.54/1.78 billion) and EPS forecast (RMB 0.97/1.12) for 20222023 will remain basically unchanged. The new revenue forecast for 2024 is 9.48 billion yuan, and the net profit attributable to the parent company is 1.96 billion yuan. It is estimated that from 2022 to 2024, the company's revenue will be 7.39/84.4/9.48 billion yuan, the net profit attributable to the parent company will be 1.54/17.8/1.96 billion yuan, and eps0.5 billion yuan 97 / 1.12/1.23 yuan, corresponding to the closing price of 19.61 yuan on March 30, 20.23/17.53/15.95xpe. Maintain the target price of 28.90 yuan and the "buy" rating.
Risk tips
The demand is lower than expected, the cost is higher than expected, and there are systemic risks.
