\u3000\u3 China Vanke Co.Ltd(000002) 372 Zhejiang Weixing New Building Materials Co.Ltd(002372) )
The company disclosed in its 2021 annual report: the annual revenue was 6.388 billion, a year-on-year increase of + 25.1%, the net profit attributable to the parent was 1.223 billion, a year-on-year increase of + 2.6%, and the net profit attributable to the parent after deduction of non-profit was 1.185 billion, a year-on-year increase of + 3.3%. Among them, the revenue in the fourth quarter was 2.361 billion, a year-on-year increase of + 25.3%, and the net profit attributable to the parent company was 450 million, a year-on-year increase of - 1.7%. The annual net profit margin of sales was 19.15%, year-on-year -4.21pct, and the net profit margin of Q4 was 19.12%, year-on-year -5.25pct. In 2021, the cash dividend ratio was 78.09% and the dividend yield was 3.06%.
In terms of products, PPR retail and concentric circle retail have outstanding performance. In 2021, the revenue of PPR pipes and fittings, the company's main product, accounted for 48.32% (year-on-year + 0.95pct), PE accounted for 26.89% (year-on-year -4.92pct), PVC accounted for 15.94% (year-on-year + 1.55pct), mainly due to PPR revenue + 27.64%, PE growth rate of 5.77% was lower than that of the whole, and PVC growth rate of 38.97%. Other products accounted for 6.42% (year-on-year + 1.98pct), and the revenue was + 80.8% year-on-year. The main business was waterproof and water purification, and concentric circle accelerated its growth.
In terms of regions, the growth rate in North China, central China, West China and South China is prominent. In 2021, East China still made the largest contribution to revenue, accounting for 51.19% (year-on-year -1.38pct, adjusted by considering the statistical caliber, the same later), revenue was + 21.84% year-on-year, and the growth rate of other regions in the reporting period was higher than that of East China. For example, South China accounted for 3.34%, revenue was + 52.78%, the West accounted for 12.91%, revenue was + 34.19%, central China accounted for 9.7%, and revenue was + 31.55% year-on-year.
In terms of gross profit margin, PPR, the main product, was stable against the trend under the pressure of rising prices of raw materials. In 2021, the gross profit margins of PPR, PE and PVC were 55.15%, 31.33% and 11.88% respectively, with a decrease of 1.15pct, 4.48pct and 11.2pct respectively, mainly due to the increase in the price of raw materials, but the decrease in the gross profit margin of the company was significantly smaller than that of its peers. We think there are two reasons: 1) retail growth was faster, the proportion of retail increased from 62% in 2020 to nearly 70% in 2021, and the decline in the proportion of engineering was mainly due to the decline of hardcover and the tightening of funds, and the growth rate needs to balance cash flow; 2) Benefiting from the price increase, the company raised the price of a full range of products in the first half of 2021, and PVC products raised the price once in the first half of the year and once in the second half of the year (cost plus).
The cash flow continues to be abundant and the statements are of high quality. The cash to income ratio in 2021 was 1.13 (1.14, 1.14 and 1.12 in 20182020), and the net cash ratio was 1.3 (1.0, 0.9 and 1.13 in 20182020 respectively). At the end of the period, the monetary capital was 2.4 billion, and the proportion of receivable income was controlled at 5.5%, compared with 5.7% in the previous year. The company's financial expenses remain negative and have no interest bearing liabilities.
Other concerns include: ① investment income - 26 million yuan, 72 million yuan in 2020. It is suggested that after adding back the investment income (the investment income of Ningbo Dongpeng decreases by 94.723 million yuan) and the interference of incentive expenses (the amortization of incentive expenses of restricted stocks in this period increases by 75.998 million yuan) (tax deduction still needs to be considered), the net profit attributable to the parent company in 2021 is slightly less than 1.4 billion, with a year-on-year increase of about 15%; ② The income tax rate in 2021q4 was 14% (16.7%, 21.9% and 10.7% in 2018q4-2020q4 respectively), which was slightly lower than that in the first three quarters (16.9%, 15.7% and 14% in 2021q1-q3); ③ The company's business objectives in 2022: operating revenue of 7.35 billion and cost and expense control of 5.7 billion.
Investment suggestion: continuous key recommendation Zhejiang Weixing New Building Materials Co.Ltd(002372) . We are optimistic about the impact of the smooth cycle of the company's consumption attributes and continue to maintain high-quality profits. In addition, according to the growth rate of the company's waterproof and water purification business in 2021 and the company's business objectives in 2022, we assume that concentric circles will continue to maintain a growth rate of more than 80%, which is expected to achieve a revenue share of about 10% this year, and the performance contribution is gradually obvious. We maintain the original forecast that the net profit attributable to the parent company from 2022 to 2024 will be RMB 1.604 billion, RMB 1.924 billion and RMB 2.311 billion, and the corresponding dynamic PE of the stock price on March 30 will be 19x, 16x and 14x respectively. Maintain a "recommended" rating.
Risk warning: macroeconomic downside risk; Risk of price fluctuation of raw materials; Receivable risk of engineering business.
