\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 186 China Railway Construction Corporation Limited(601186) )
Revenue performance grew steadily, and the overall performance was better than expected. In 2021, the company achieved an operating revenue of 1020 billion yuan, a year-on-year increase of 12.05%; The net profit attributable to the parent company was 24.7 billion yuan, a year-on-year increase of 10.26%, and the deduction of non performance increased by 9% year-on-year. The overall performance was better than expected. Quarter by quarter, Q1 / Q2 / Q3 / Q4 achieved revenue of 2340 / 2546 / 247 / 284.5 billion yuan respectively, with a year-on-year change of + 61.2% / + 12.8% / – 2.5% / – 0.62%,; In a single quarter, the net profit attributable to the parent company was 5 / 73 / 56 / 6.8 billion yuan, with a year-on-year increase of + 68.5% / + 15.1% / flat / – 9.2%. The decline in performance in the fourth quarter was mainly due to the increase in the provision for impairment of receivables from real estate customers. In terms of business, engineering contracting / survey and design / industrial manufacturing / real estate / logistics and other businesses achieved revenue of 8938 / 194 / 219 / 507 / 103.7 billion yuan respectively, with a year-on-year increase of 9.1% / 5.7% / 23.2% / 28.1% / 38.5%. In the project contracting, the revenue of capital construction and housing construction was 512 / 222.7 billion yuan respectively, with a year-on-year increase of 2.7% / 24.6%. The company’s business plan for 2022 is that the newly signed contract amount is 2876 billion yuan, an increase of 2% over the actual value of 21 years, and the operating revenue is 1085 billion yuan, an increase of 6.4% over the actual value of 21 years. The company’s dividend plan is to pay 2.46 yuan in 10, with a dividend rate of 15%, and the dividend rate corresponding to the current stock price is 3.2%.
The gross profit margin improved, the expense rate was well controlled, and the provision for impairment increased significantly. In 2021, the company’s comprehensive gross profit margin was 9.60%, an increase of 0.33 PCT over the same period of last year. In terms of business, the gross profit margin of engineering contracting / survey and design / industrial manufacturing / real estate development / material logistics changed by + 0.67 (yoy-0.1 / + 0.8) / – 0.30 / – 1.30 / – 2.77 / – 2.07 PCT respectively year-on-year. The improvement of profitability of engineering business drives the overall gross profit margin to rise slightly. The expense rate during the period was 5.0%, a decrease of 0.13 PCT over the same period of the previous year, of which the sales / management / R & D / financial expense rate changed by -0.02 / -0.06 / -0.06/0.00 PCT respectively. The impairment loss of assets (including credit) is about 6.14 billion yuan, and the new provision is mainly the loss provision of financial assets such as receivables of real estate customers. The net outflow of operating cash flow in the whole year was 7.3 billion yuan, compared with 40.1 billion yuan in the same period of last year. Our analysis is mainly due to: 1) some engineering projects are affected by the delayed payment of owners’ funds, and the payment collection is slow; 2) The price of raw materials fluctuated greatly in the first half of the year. In order to ensure the stability of upstream supply, the company reserved some materials in advance, resulting in the advance of procurement expenditure. 3) With the change of accounting standards, some PPP project expenditures are reclassified from investment cash flow to operating cash flow. Quarterly, Q3 / Q4 cash flows were net inflows of 7.96 billion yuan and 40.93 billion yuan respectively, which had been significantly improved compared with the first half of the year. The net outflow of investment cash flow was 61.07 billion yuan, an increase of 10.77 billion yuan year-on-year. The annual average roe was 9.4%, yoy-0.2 PCT, the net interest rate increased by 0.05 PCT, the total asset turnover rate was basically the same as that of the previous year, and the equity multiplier decreased by about 0.04.
The newly signed orders grew steadily, the railway performed well, and the reserves of orders in hand were abundant. The company announced that the total amount of newly signed contracts in 2021 was 2816.6 billion yuan, a year-on-year increase of 10.39%. Specifically, the newly signed engineering contracts amounted to 241.5 billion yuan, with a year-on-year increase of 8.54%, of which 3765 / 2730 / 1696 / 9736 / 430.9 billion yuan were newly signed for railway / highway / urban rail / housing construction / municipal respectively, and yoy + 30.17% / + 4.14% / – 13.73% / + 13.41% / – 6.3%. The railway orders increased rapidly, which is expected to benefit mainly from the launch of large projects such as Sichuan Tibet railway. The newly signed survey and design contract was 26.6 billion yuan, a year-on-year increase of 17.74%. Among other non engineering contracting orders, industrial manufacturing / real estate development / material logistics signed 341 / 1432 / 181.9 billion yuan and yoy-1.24% / + 13.20% / + 51.12% respectively. By the end of 2021, the company’s orders on hand were 4380.9 billion yuan, a year-on-year increase of 14.35%, 4.3 times the revenue of 2021. Sufficient orders are expected to ensure the continuous and steady growth of the company’s subsequent performance.
Investment suggestion: we estimate that the net profit attributable to the parent company in 22-24 years will be RMB 276 / 309 / 34.2 billion respectively, with an increase of 12% / 12% / 11% respectively, and EPS will be RMB 2.03/2.27/2.52 respectively. At present, the corresponding PE of the current stock price is 3.8/3.4/3.1 times respectively. At present, Pb (LF) is 0.5 times. The valuation is in the lowest range in history and maintains the “buy” rating.
Risk tip: the risk of asset impairment, the gross profit margin of real estate business decreases, and the project implementation progress does not meet expectations.
