\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 186 China Railway Construction Corporation Limited(601186) )
Event:
China Railway Construction Corporation Limited(601186) released the annual report of 2021. During the reporting period, the company achieved an operating revenue of 1020 billion yuan, an increase of 12.05% and a net profit attributable to the parent company of 24.7 billion yuan, an increase of 10.26%; Deduct the net profit not attributable to the parent company of 22.4 billion yuan, an increase of 9.07% at the same time. The newly signed contract amount in the whole year was 2819.7 billion yuan, 103.10% of the annual plan, with a year-on-year increase of 10.39%; The company plans to pay a cash dividend of 0.246 yuan per share (including tax).
Comments:
In the second half of the year, the profitability recovered and the revenue remained at a high level: in 2021, the company achieved an operating revenue of 1020 billion yuan. In terms of business, the revenue of engineering contracting business, survey and design consulting business, industrial manufacturing business, real estate development business, material logistics and other businesses was 893.8 billion yuan, 19.4 billion yuan, 21.9 billion yuan, 50.7 billion yuan and 103.7 billion yuan respectively; Increased by 9.90%, 5.20%, 21.13%, 23.78% and 35.37% respectively. The changes in operating income of material logistics and other businesses are mainly due to the expansion of logistics trade business scale. The project contracting business is still the company’s traditional core business, with a revenue contribution of 87.63%, a decrease of 1.72 PCTs, mainly due to the diversification of the company’s business and the expansion of other business scale. Among them, the revenue of housing construction business is 222.7 billion yuan, an increase of 24.60% over the same period of last year, which is a major driving force for revenue growth.
In 2021, the company’s comprehensive gross profit margin was 9.60%, with an increase of 0.34pct, of which 3q21 and 4q21 reached a high level of 8.85% and 12.28%, successfully reversing the impact of 1q21’s low gross profit margin. The gross profit margins of engineering contracting business, survey and design consulting business, industrial manufacturing business, real estate development business, material logistics and other businesses were 7.88%, 33.06%, 22.67%, 17.56% and 7.65% respectively; Compared with the same period last year, it increased by 0.67 PCT, -0.30 PCT, -1.30 PCTs, -2.77 PCTs, -2.07 PCTs. Among them, the decrease of gross profit margin of real estate development business is mainly caused by house price control under “real estate is not fried”.
The market operation is excellent and new, and the newly signed contracts are steadily improved: the newly signed contract amount of the company in 2021 is 2819.7 billion yuan, completing 103.10% of the annual plan, with a year-on-year increase of 10.39%. In terms of business, engineering contracting business, survey and design consulting business, industrial manufacturing business, material logistics, real estate development business and other businesses received newly signed contracts of 241.5 billion yuan, 26.6 billion yuan, 34.1 billion yuan, 181.9 billion yuan, 143.2 billion yuan and 23.3 billion yuan respectively, with an increase of 8.54%, 17.74%, – 1.24%, 51.12%, 13.20% and – 21.04% respectively; In the engineering contracting sector, housing construction projects contributed 973.6 billion yuan of newly signed contracts, accounting for 40.39% of the newly signed contracts in the engineering contracting sector, with a year-on-year increase of 13.41%, which is the main driving force for the growth of newly signed contracts; The newly signed contract amount of railway engineering was 376.5 billion yuan, accounting for 15.62% of the newly signed contract amount of the engineering contracting sector, with a year-on-year increase of 30.17%. The large increase was due to the launch of national key construction projects. The company gave full play to its competitive advantages in the industry and ensured the maximization of orders. By the end of 2021, the outstanding contract amount of the company was 4854.9 billion yuan, with a year-on-year increase of 12.41%. There were sufficient orders on hand to provide sufficient guarantee for the growth of future revenue.
The cash flow has been tightened and the statement assets have been continuously improved: in 2021, the company’s net cash flow from operating activities and net cash flow from investment activities were – 7.3 billion yuan and – 61.1 billion yuan respectively; The net cash flow from operating activities was negative for the first time since 2014, and the cash interest guarantee ratio decreased to 0.96 times, with a decrease of 80.72%, mainly due to the increase in cash paid for purchasing goods and receiving labor services in the reporting period. The net cash flow from financing activities was 10.6 billion yuan, a decrease of 27.6 billion yuan or 72.27% over the same period last year, mainly due to the year-on-year increase in cash paid for debt repayment in the reporting period. The company’s current income decreased by about 105% in the same period.
By the end of 2021, the company’s asset liability ratio was 74.39%, and the company’s financing structure continued to be reasonably optimized, with a decrease of 0.37 PCT compared with the end of 2020, reaching the assessment target of asset liability ratio of SASAC for two consecutive years.
Maintain the “buy” rating of the company’s A-shares and H-shares: the company’s Q1 gross profit margin in 2021 was only 7.44%, which was far lower than the level of the same period in previous years. Under the unfavorable start, the company still reversed strongly in the second half of the year, making the annual gross profit margin rise instead of decrease, reaching the level of 9.60%, reflecting the company’s strong operating ability and toughness. At the same time, while continuously expanding its business scale, the company emphasizes cultivating excellence, expanding innovation, expanding capacity and increasing efficiency, creating a diversified and complete industrial chain layout, and continuously obtains national project support by virtue of its leading position in the industry. In addition, the company has continuously optimized its financing structure and reached the standards set by the SASAC for two consecutive years. Maintain the company’s EPS of 2.06 yuan and 2.42 yuan from 2022 to 2023 respectively, increase the EPS of 2.73 yuan in 2024, and the current price corresponding to the dynamic P / E ratio of a / H shares in 2022 is 3.7x/1.9x respectively, maintaining the “buy” rating of A-Shares and H shares of the company.
Risk tip: the risk of capacity expansion and efficiency increase, the landing of output is less than expected, the risk of tightening real estate policies, and the risk of spot outbreak of the epidemic.
