\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: during the reporting period, the company achieved an operating revenue of 6.388 billion yuan, a year-on-year increase of 25.13%; The net profit attributable to shareholders of listed companies was 1.234 billion yuan, a year-on-year increase of 3.49%.
Key investment points:
The sales volume of main products increased steadily and the operating performance increased steadily. In 2021, the company achieved a total operating revenue of 6.388 billion yuan, a year-on-year increase of 25.13%; The net profit attributable to shareholders of listed companies was 1.234 billion yuan, a year-on-year increase of 3.49%. In 2021, the sales volume of the company's plastic pipes increased by 12.34%. Due to the high revenue of PPR and PE with high selling price, the average selling price is high. However, since 2020, affected by the sharp rise of oil price, the price of raw materials of the company has been in an upward trend. However, due to the fierce market competition, the price increase of product sales failed to keep pace with the increase of raw materials, and the gross profit margin and net profit of the company have declined.
Retail and Engineering "two wheel drive" to accelerate market expansion. Different from other leading enterprises in the industry, the company's main customers are C-end customers, so the company has great advantages in retail business. In order to make up for the disadvantages of engineering end, the company proposes a "two wheel drive" marketing model of retail and engineering. In terms of retail business, the company strengthened the development of marketing outlets by filling in gaps, filling in weaknesses and expanding strengths, accelerated market layout and effectively improved its market share. In 2021, the sales of the company's western, central and South China markets increased by more than 30% year-on-year. In terms of engineering business, the company comprehensively strengthened business expansion. Adhere to the principle of "risk control first", dig deep into core areas, accelerate the layout of blank and weak markets, and actively break through the strategic cooperation of high-quality key customers to achieve healthy development. Benefiting from large-scale infrastructure and urban renewal projects, the company's revenue is expected to further increase.
Profit forecast and investment rating. The company is a leading enterprise of PP-R pipeline in China and has a leading competitive position. The company is expected to benefit from the improvement of industry concentration. We predict that the company's net profit attributable to the parent company from 2022 to 2024 will be 1.42 billion yuan, 1.693 billion yuan and 1.975 billion yuan respectively, with corresponding EPS of 0.89 yuan, 1.06 yuan and 1.24 yuan respectively, and corresponding PE of 21.99x, 18.44x and 15.81x. It will be rated as "buy" for the first time.
Risk warning: the market demand is less than expected; Rising prices of raw materials; Industry competition intensifies; The epidemic has repeatedly affected the economy; Adverse changes have taken place in the macro environment.
