\u3000\u3 China Vanke Co.Ltd(000002) 372 Zhejiang Weixing New Building Materials Co.Ltd(002372) )
The company released its 2021 annual report, with an annual revenue of 6.39 billion yuan, an increase of 25.1% at the same time; The net profit attributable to the parent company was 1.22 billion yuan, an increase of 2.6% at the same time; EPS0. 77 yuan per share, with an increase of 1.3%; The annual net operating cash flow was 1.59 billion yuan, an increase of 18.4%. In the fourth quarter, the company achieved a revenue of 2.36 billion yuan, an increase of 25.3% and 44.0% month on month; The net profit attributable to the parent company was 450 million yuan, a decrease of 1.7% and a month on month increase of 25.4%. The company’s performance improved significantly in the fourth quarter.
Key points supporting rating
Volume: the market development is still smooth, and the production and sales have maintained double-digit growth. Throughout the year, the company achieved sales volume of 298000 tons of plastic pipes, an increase of 12.3% and production volume of 304000 tons, an increase of 12.0%; The sales volume of other businesses was 35000 tons, an increase of 205.8% at the same time. The sales volume of various businesses of the company still maintained a high growth level. Concentric circles develop the second growth curve of products other than plastic pipes to double sales.
Price, cost and gross profit: the cost rises more and the gross profit per ton narrows. We estimate that the annual selling price of the company’s products per ton is 19000 yuan, an increase of 4.0% at the same time; The cost per ton of product was 11500 yuan, an increase of 10.8% at the same time; The gross profit per ton of products was 7630.7 yuan, a year-on-year decrease of 4.9%. In 2021, the prices of HDPE, PP, PVC and PE increased by 10.6%, 10.8%, 40.4% and 12.2% respectively compared with the average price in 2020, slightly higher than the increase of the company’s cost per ton of products.
Looking forward to 2022, the company has many highlights: the consumption and brand attributes are continuously optimized, and the profit is expected to continue to grow steadily; The company’s “concentric circle” business is expected to continue to maintain a growth rate of more than 80%, and the proportion of revenue will continue to increase in the future; The synergy of construction + detection and product + service is good, the matching rate of products is expected to increase, and the income of single household is expected to increase; The price increase of products is smooth. If the cost pressure is reduced in the second half of the year, the profit margin is expected to be enlarged.
Valuation
Considering the smooth development of concentric circle business and the continuous development of plastic pipeline market, we expect the company’s revenue to be RMB 7.44 billion, RMB 8.26 billion and RMB 8.98 billion from 2022 to 2024; The net profit attributable to the parent is 1.56 billion yuan, 1.88 billion yuan and 2.09 billion yuan respectively; EPS is 0.98, 1.18 and 1.31 yuan respectively. Maintain the company’s buy rating.
Main risks of rating
The price of raw materials remains high, the poor real estate sales lead to the obstruction of pipe retail, and the stock update is less than expected
