\u3000\u3 China Vanke Co.Ltd(000002) 132 Henan Hengxing Science & Technology Co.Ltd(002132) )
Company events
The company issued its annual report for 2021. 1) Throughout the year, the company achieved an operating revenue of RMB 3.396 billion in 2021, with a year-on-year increase of 19.89%, and a net profit attributable to the parent company of RMB 140 million, with a year-on-year increase of 14.80%. 2) From the fourth quarter alone, Q4 achieved an operating revenue of 872 million yuan, a year-on-year increase of 16.82%, and a net profit attributable to the parent company of 49 million yuan, a year-on-year increase of 32.24%.
The production capacity of the 21 diamond line project climbed steadily, and the production, sales and gross profit margin increased significantly
2021 is the first year of the company's diamond line production capacity breakthrough. In the first half of that year, the company's monthly average production capacity exceeded 500000 km, and in the second half of that year, the monthly average production capacity exceeded more than 1 million km, doubling the growth. With the steady release of the production capacity of diamond line, the production and sales volume and gross profit margin increased significantly: ① in terms of production and sales volume, the company achieved an output of 8.19 million km in 2021, a year-on-year increase of + 201.02%, and a sales of 8.058 million km, a year-on-year increase of + 230.35%; ② In terms of gross profit margin, the gross profit margin of the company's diamond line business increased to 42.89%.
The business of traditional metal products has developed steadily, and the large volume of diamond line is expected to contribute to the high growth of performance
1) traditional metal products: the company has a production capacity of 100000 tons of galvanized steel wire and steel strand and 200000 tons of prestressed steel strand. The new 200000 ton prestressed steel strand project in Guangxi is expected to be fully completed by the end of 2022 and contribute part of the output.
2) diamond line business: ① steadily promote the construction of diamond line project, and the production and marketing scale is expected to be further improved. At present, the company actively promotes the construction of 20 million km and 10 million km projects, plans to realize the production capacity of 46 million km Vajra line by the end of the year, and plans to produce 30 million km Vajra line in 2022 (16 million km Vajra line project achieves production capacity + Construction of 30 million km Vajra line new project and plans to put into operation 40-50%). As the production capacity of diamond line gradually climbs, the profitability of the company's business is expected to increase significantly. ② Single machine 16 line equipment has been put into use one after another to promote the improvement of production efficiency and operation efficiency, and the gross profit margin of this business is expected to continue to increase.
The trial production of silicone project is successful, and the product volume opens up profit space
The company's annual output of 120000 tons of high-performance silicone project is advancing as planned, and the trial production conditions are met at the end of the reporting period. In mid March 2022, the whole process of the project device has been opened, and DMC products that meet the needs of customers have been produced and sold. The company plans to release 70-80% of its production capacity in 2022. We expect the business to achieve a profit of 300 million yuan in 22 years, which is expected to significantly increase the company's performance.
Investment advice
The company's traditional metal products business has developed steadily, and diamond wire and silicone are expected to achieve a large amount, which will help the rapid improvement of the company's profitability. We expect the company to achieve an operating revenue of RMB 7.64/91.1/9.56 billion and a net profit attributable to the parent company of RMB 1.15/12.8/1.36 billion from 2022 to 2024. At present, the corresponding PE of the stock price is 7 / 6 / 6 times respectively, maintaining the "buy" rating.
Risk tips
The product price fluctuates violently, the progress of the company's projects under construction is less than expected, the release of production capacity is less than expected, and the downstream demand is less than expected.
