\u3000\u3 China Vanke Co.Ltd(000002) 372 Zhejiang Weixing New Building Materials Co.Ltd(002372) )
Event Zhejiang Weixing New Building Materials Co.Ltd(002372) released the annual report of 2021, and achieved an operating revenue of 6.388 billion yuan in 2021, with a year-on-year increase of 25.13%; The net profit attributable to the parent company was 1.223 billion yuan, a year-on-year increase of 2.58%; The net profit attributable to the parent company after deduction was 1.185 billion yuan, a year-on-year increase of 3.33%.
The company achieved steady growth in annual performance. In 2021, the company achieved an operating revenue of 6.388 billion yuan (109.01% of the planned target at the beginning of the year), with a year-on-year increase of 25.13%, much higher than the company’s planned growth target of 15%. Under the background of continuous real estate regulation, slowdown of infrastructure investment, accelerated promotion of dual carbon policy and continuous upgrading of dual control of energy consumption in 2021, the company still achieved steady growth in revenue performance. The main reasons are as follows: 1) the sales volume of main products increased, and the sales volume of pipeline reached 298100 tons in 21 years, with a year-on-year increase of 12.34%; 2) Due to the sharp rise in the price of raw materials and the increase in the price of the company’s products; 3) The company has strengthened market development, continuously strengthened the expansion of new businesses (waterproof and water purification products), and further improved the company’s revenue scale. In addition, the company’s total accounts receivable was 353 million yuan, a year-on-year increase of 20.89%, lower than the growth rate of revenue; The net cash flow from operating activities was RMB 1.594 billion, with a year-on-year increase of 18.37%. In 2021, when the market demand is weakening and the downstream funds are tight, the company’s principle of “risk control first” shows results, strengthening risk control and optimizing downstream customers and projects, so as to maintain a stable level of the company’s accounts receivable and operating cash flow.
The gross profit rate of the pipe business was 32.87% year-on-year, with a significant year-on-year increase of PPR of 15.55%, and the main business revenue of the pipe business was maintained at a high level of PPR of 15.87%, with a year-on-year increase of PPR of 32.87%. PE / PVC achieved a revenue of 1.717/1.018 billion yuan (accounting for 26.89% / 15.94%), a year-on-year increase of 5.77% / 38.37%, and a gross profit margin of 31.33% / 11.88%, a year-on-year decrease of 4.48/11.20 percentage points. The sharp decline in the gross profit margin of PVC pipes is mainly due to the sharp rise in the price of raw materials and the failure of the price increase of PVC pipes to offset the rise in raw materials. In addition, the company accelerated the sinking of retail channels and the penetration of marketing outlets, comprehensively improved market share and achieved rapid development of retail business. As the main sales area of the company, East China achieved a revenue of 3.270 billion yuan (accounting for 51.19%), an increase of 21.84% year-on-year; The revenue of South China / West China / Central China increased significantly, realizing a revenue of 213 / 825 / 619 million yuan, a year-on-year increase of 52.78% / 34.19% / 31.55%. With the subsequent development of the company’s stock markets such as secondary new houses and second-hand houses, the scale of retail business continues to expand, and the company’s performance is expected to further improve.
The “concentric industrial chain” has great development space in the follow-up. In 2021, the company’s new business achieved substantial growth, and other products such as waterproof and water purification achieved an operating revenue of 410 million yuan, with a year-on-year increase of 80.80% and a gross profit margin of 40.67%. Due to the continuous upgrading of consumption and the demand of market competition, “concentric circle” strategy has become the growth point of future performance. The company continues to strengthen new business development, improve product matching rate, and provide customers with one-stop products and system services. With the increase of the company’s product categories and the improvement of the quality of products and services, the company’s market competitiveness will be gradually enhanced.
Investment suggestion as a leading enterprise of plastic pipeline, the company has significant advantages in retail business, and the continuous expansion of new businesses such as waterproof and water purification further improves the company’s competitive advantage; Under the background of steady growth in 2022, the downstream demand of the company is expected to grow steadily. It is estimated that the net profit attributable to the parent company in 22-24 years is RMB 1.539/18.332208 billion, the earnings per share is RMB 0.97/1.14/1.36, and the corresponding P / E ratio is 21.16/17.95/15.08 times. Maintain a “recommended” rating.
The risk indicates that the new business expansion is less than expected, the downstream demand is less than expected, and the price of raw materials rises.
