\u3000\u3 China Vanke Co.Ltd(000002) 352 S.F.Holding Co.Ltd(002352) )
Summary of performance: S.F.Holding Co.Ltd(002352) 2021 achieved operating revenue of 207.19 billion yuan (+ 34.5%), net profit attributable to parent company of 4.27 billion yuan (- 41.7%), net profit deducting non attributable to parent company of 1.83 billion yuan (- 70.1%), and the performance was in line with expectations (our previous profit forecast for 2021 was 4.24 billion yuan). Looking at 21q4 alone, the company achieved a revenue of 71.33 billion yuan (+ 60.7%), a net profit attributable to the parent of 2.47 billion yuan (+ 65.1%), and a net profit excluding non attributable to the parent of 1.5 billion yuan (+ 46.1%) in a single quarter. Excluding the impact of 370 million net profit in Kerry’s consolidated statement, the company also set a new high in Q4 profit. Quarterly, the company’s Q1-Q4 revenue growth rate was 27.1%, 21.7%, 23.5% and 60.7% respectively, mainly due to the impact of consolidated Kerry in the fourth quarter; The net profit deducted from non parent company was – 1.13 billion yuan, 660 million yuan, 810 million yuan and 1.5 billion yuan respectively, with continuous improvement month on month.
The revenue growth of aging parts is slightly slower under the high base, and Kerry’s consolidated international business is growing at a high rate. The hierarchical adjustment of products upgraded the “standard land transportation” in the economic parts business to the “SF standard express” under the aging parts business. The revenue of aging parts under the new caliber was 96.16 billion yuan, a year-on-year increase of + 7.3%, realizing the growth on a high basis; The business of economic parts continued to focus on the electric trademark express and the joining network Fengwang dual network, focusing on the e-commerce parts market and optimizing the product structure. The annual revenue was 32.27 billion yuan, a year-on-year increase of + 54.7%. The annual revenue of express business was 23.25 billion yuan, a year-on-year increase of + 25.6%; The revenue of cold operation business was 7.8 billion yuan, a year-on-year increase of + 20.1%; The revenue of emergency delivery business in the same city was 5 billion yuan, a year-on-year increase of + 59.1%; After 21q4 consolidation, the revenue of supply chain and international business of Kerry Logistics reached 39.2 billion yuan, a year-on-year increase of + 199.8%.
The profit is repaired quarterly, and the profit inflection point of express business has reached. In terms of profitability, the company’s comprehensive gross profit in 21 years was 25.64 billion yuan, with a gross profit margin of 12.4% (year-on-year – 4pp). In 21q1-q4, the gross profit margin was 7.2% (year-on-year-8.8pp), 12.8% (year-on-year-8.2pp), 13.5% (year-on-year-3.7pp) and 14.5% (year-on-year-2.5pp). In 21 years, the company’s net profit attributable to the parent company was 4.27 billion yuan, with a net profit attributable to the parent company of 2.06% (year-on-year – 2.7pp), deducting 1.83 billion yuan from non attributable to the parent company, 0.9% (- 3.09pp) from non attributable to the parent company, deducting 1.13 billion yuan from non net loss in 21q1 and 1.4%, 1.7% and 2.1% from 21q2-q4 respectively. At the beginning of 2021, the company’s investment in site, equipment, transportation capacity and the proportion of preferential items with low price increased, resulting in pressure on the profit at the beginning of the year. In the later stage, the company took the initiative to adjust the business strategy, optimize the product and customer structure on the revenue side, implement fine control on the cost side, and repair the profitability of the company quarterly. In terms of business, in 2021, the express business of the company achieved a net loss of 580 million yuan, and 21h2 basically achieved profit and loss balance.
Four networks financing continued to advance, with significant cost reduction and efficiency increase, and the rate of management expenses decreased. SF’s four networks financing strategy has achieved remarkable results. In 2021, the financing rate of the first and second tier sites reached 63.1%, with a year-on-year increase of + 15pp; There are 1500 + financing lines, and the average vehicle load is increased by 1.1 tons; The handling efficiency of transit personnel was + 18.7% year-on-year, and the efficiency of warehouse keeper was + 25% year-on-year; The company increased the frequency of 232 trunk lines, straightened 267 trunk lines, and increased the overall speed for 3 + hours. Under the four networks financing, the annual cost reduction reached 670 million yuan, including 380 million yuan for trunk and branch lines, 110 million yuan for transit and 180 million yuan for terminals. In 2021, SF’s management expense ratio was 7.3% (a year-on-year decrease of about 0.2pp). In the whole year of 21, the management expense ratio decreased quarter by quarter, and 21q4 was 6.8%. In the 21st year, the sales expense ratio of SF was 1.4% (a year-on-year decrease of about 0.1pp). In terms of cash flow, in 2021, SF’s net operating cash flow was 15.4 billion (+ 36%), capital expenditure was 28.9 billion (+ 104%), and the consideration paid for the tender offer of 51.5% equity of Kerry Logistics for major projects in foreign investment was 14.6 billion yuan.
Profit forecast and investment suggestions. Cost improvement will be the biggest fundamentals of SF in 2022. The improvement of four networks financing and capacity utilization will continue to be realized at the gross profit end, and the annual cost reduction will exceed the 21-year level. At the same time, the optimization space of expenses during this period is underestimated by the market, which also significantly improves the core profit. In the long run, the production of Ezhou airport will inject new momentum into the growth of time-effective parts, and the price increase of e-commerce parts under the guidance of industrial policies will also optimize the profitability of SF Express’s whole product line; Together with Kerry Logistics, it is expected to open a new growth curve of SF international business from the aspects of management team, business collaboration and asset reuse. We believe that the current market value of 220 billion only reflects the value of SF time limited network, and there is no reasonable pricing for the marginal improved express, intra city and other businesses, as well as the call options with high growth of international business. We are optimistic about the rise of the company’s long-term business barriers, and suggest paying attention to the long-term opportunities brought by the epidemic and short-term shocks such as oil prices. It is estimated that the net profit of S.F.Holding Co.Ltd(002352) attributable to the parent company from 2022 to 2024 will be 6.82 billion yuan, 8.81 billion yuan and 10.39 billion yuan respectively, corresponding to 33, 25 and 22 times of the current PE respectively, maintaining the “buy” rating.
Risk tip: the growth rate of e-commerce consumption decreased, capital expenditure exceeded expectations, and the cultivation of new business was less than expected.
