\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 186 China Railway Construction Corporation Limited(601186) )
The net profit attributable to the parent company increased steadily by 10.3% in 21 years, and the impairment loss increased year-on-year
In 21 years, the company achieved a revenue of 1020 billion yuan, yoy + 12.05%, and a net profit attributable to the parent company / deduction of non net profit of 247 / 22.4 billion yuan, yoy + 10.26% / + 9.07%. In terms of business, the five business segments of engineering contracting / real estate / industrial manufacturing / survey and design / logistics and trade achieved revenue of 8938 / 507 / 219 / 194 / 103.7 billion yuan respectively, yoy + 9.9% / + 23.8% / + 21.1% / + 5.2% / + 35.4%. Impairment losses: the company’s asset / credit impairment losses in 21 years were 1.59/8.28 billion yuan respectively, an increase of 570 / 5.58 billion yuan over 20 years, dragging down the growth of annual performance. The increase of asset impairment loss in 21 years is mainly due to the provision for loss of goodwill of its acquired companies such as aldesa and cideon; The high increase in the scale of credit impairment loss is mainly due to the provision for loss of financial assets such as downstream receivables of real estate.
In the 21st year, the gross profit margin increased by 0.3pct year-on-year and the expense rate decreased by 0.1pct
Gross profit side: the comprehensive gross profit margin was 9.6% in 21 years, an increase of 0.3pct compared with 20 years. In a single quarter, the comprehensive gross profit margin of 21q4 recorded 12.3% and increased by 3.4pct month on month compared with Q3. We speculate that the improvement of the profitability of the engineering contracting sector may be driven by the increase of the scale and proportion of housing construction and municipal business. Expense side: in 21 years, the company’s expense rate during the period was 5.0%, a year-on-year decrease of 0.1/0.3pct respectively compared with 20 / 19 years, of which the sales / management / Finance / R & D expense rate was 0.6% / 2.0% / 0.4% / 2.0% respectively, and all indicators were basically the same as those in 20 years. Cash flow: the net operating cash flow of the company in 21 years was – 7.3 billion yuan, a decrease of 47.4 billion yuan compared with the net inflow in the same period of 20 years, mainly due to the significant increase in cash paid by the company for purchasing goods and receiving labor services.
The steady growth policy is strengthened, the order carry forward is expected to speed up, the transformation of investment operators and sufficient development momentum
In the short term: the steady growth policy is strengthened, there are sufficient orders on hand, and the order carry forward revenue is expected to accelerate. On March 29, the executive meeting of the State Council proposed to make good use of government bonds, expand effective investment, promote the improvement of weaknesses, strengthen the aftereffect and stable economic growth, and decided to start a number of new water conservancy projects with mature conditions to improve the protection of water resources and the ability of disaster prevention and reduction. In 2021, the newly signed contract amount of the company was 241.5 billion yuan, a steady increase of 8.5% year-on-year, of which the newly signed contract amount of water conservancy and power engineering was 60.6 billion yuan. At the end of 2021, the company’s orders on hand were 4854.9 billion yuan, a year-on-year increase of 12.4%. In the medium and long term, the company strengthens the whole industry chain development mode of “design investment construction operation”, actively transforms and invests in operators, and has sufficient development momentum. The company’s “14th five year plan” strategic plan proposes to accelerate the layout of green environmental protection, urban operation and other fields, create a series of operation brands such as “railway construction expressway”, and gradually realize the transformation and upgrading from traditional construction contractors to investment construction operators. The franchise right of the company increased steadily from 39.8 billion yuan at the end of 2016 to 60 billion yuan at the end of 2021, CAGR + 8.6%.
Profit forecast and valuation
It is estimated that the company’s operating revenue from 2022 to 2024 will be 1143.8 billion yuan, 1274.8 billion yuan and 1419.8 billion yuan, with a year-on-year increase of 12.14%, 11.46% and 11.37%, corresponding to the net profit attributable to the parent company of 27.501, 30.341 and 33.533 billion yuan, with a year-on-year increase of 11.38%, 10.33% and 10.52%, and corresponding EPS of 203, 2.23 and 2.47 yuan. The current price corresponding to PE is 3.8, 3.4 and 3.1 times. Maintain the “overweight” rating.
Risk tip: the growth rate of infrastructure investment is lower than expected; The growth rate of real estate development and sales was lower than expected; The growth rate of logistics trade was lower than expected.
