\u3000\u3 China Vanke Co.Ltd(000002) 541 Anhui Honglu Steel Construction(Group) Co.Ltd(002541) )
Key points
Event:
The company issued the 2021 annual report. In 2021, the company realized a revenue of 19.51 billion, an increase of 45% and a net profit attributable to the parent company of 1.15 billion, an increase of 44%, slightly higher than the performance express; The non net profit deducted was 857 million, an increase of 41% at the same time. Q4’s revenue in a single quarter was 6.137 billion, an increase of 56% at the same time. The net profit attributable to the parent company in a single quarter was 326 million, an increase of 9.8% at the same time, deducting 247 million non net profit, a decrease of 0.28% at the same time, and a month on month increase of 15%.
Comments:
The production capacity continued to expand and the margin of non net profit deducted per ton improved: during the reporting period, the company’s steel structure sales volume was 3.18 million tons, an increase of 29% at the same time; The output reached 3.39 million tons, an increase of 35% at the same time; The output of steel structure is about 210000 tons higher than the sales volume, of which about 100000 tons are put into inventory and about 108000 tons are used for self use (65000 tons in 2020). The self use volume increased by about 66% at the same time, mainly due to the significant increase of the company’s production capacity. During the reporting period, the annual average steel structure production capacity was more than 3.9 million tons (3.2 million tons in v.s2020); The capacity utilization rate was 87%, with an increase of about 9pct. By the end of 2021, the company’s steel structure production capacity has reached about 4.2 million tons, with an increase of about 6 Shenzhen Quanxinhao Co.Ltd(000007) 00000 tons. During the reporting period, the company’s steel structure output grew rapidly, mainly because the company’s new production capacity was gradually released and the production efficiency of existing production capacity was improved. There are ten production bases under construction and completed by the company, and the steel structure capacity is expected to reach 5 million tons / year by the end of 2022.
In 2021, the non net profit deducted per ton of the company was 266 yuan / ton, an increase of 23 yuan / ton, and the profitability of core business was improved. 21q4, the non net profit deducted per ton of the company was 276 yuan / ton, with a ring increase of 24 yuan / ton, and the margin of profitability was improved.
The gross profit margin was affected by the price of raw materials and business structure, and the expense rate decreased slightly during the period: during the reporting period, the company’s comprehensive gross profit margin was 12.64%, with a decrease of about 0.9pct, or due to: 1) the rise of steel price; 2) The proportion of light steel business income increased (the gross profit margin of light steel is low). In addition, other business income (scrap + steel trade) was 820 million, an increase of 19.31% at the same time; The gross profit of other businesses (mainly scrap) was about 710 million yuan, an increase of 77% at the same time.
During the reporting period, the company’s management + R & D expense rate was 4.41%, with a decrease of 0.1pct, of which the management expense rate decreased by 0.24pct and the R & D expense rate increased by 0.13pct. The decrease in the rate of administrative expenses was mainly due to the decrease in the expenses of repair and office expenses during the reporting period, and the increase in the rate of R & D expenses was mainly due to the company’s increased R & D investment during the reporting period. The sales expense rate was 0.8%, with an increase of 0.05pct; The financial expense rate was 0.78%, with an increase of 0.03pct. The expense rate during the period was 5.99%, with a decrease of 0.03pct.
The operating cash flow decreased at the same time, or affected by the shortage of downstream funds: in 2021, the operating cash flow of the company was – 200 million yuan, with a decrease of about 360 million yuan; Operating cash flow decreased, or mainly due to the year-on-year decline in cash to cash ratio. The company’s cash to cash ratio in 21 years was 98%, with a decrease of 7pcts. At the end of the period, the book value of the company’s accounts receivable was 2.14 billion yuan, an increase of about 38% at the same time, or because the funds of downstream engineering enterprises were in a tight state as a whole, the company was affected by stages. The aging structure of accounts receivable was optimized, accounting for 18.05% over 3 years, with a decrease of 4.25 PCTs. From the perspective of cash flow statement, the main factor affecting the company’s operating cash flow is the year-on-year increase of inventory of about 1.8 billion (year-on-year increase of about 1.1 billion in 2020). With the continuous increase of the proportion of the company’s steel structure manufacturing business, the new base has gradually entered stable operation, and the company’s operating cash flow will return to the previous level.
Continuous improvement of operating efficiency: in 21 years, the number of inventory turnover days is 140 days, with a decrease of 21 days. The turnover days of accounts receivable are 34 days, with 9 days deducted. The number of business cycle days is 174 days, with a decrease of 30 days. The net business cycle is 152 days, minus 15 days. The operating efficiency of the company has improved significantly.
Profit forecast, valuation and rating: Anhui Honglu Steel Construction(Group) Co.Ltd(002541) is a leading company in the field of steel structure manufacturing with the clearest growth in the fabricated industry chain and significant industry competitiveness. It will benefit from the rapid growth of the fabricated industry and the tight balance between the supply of steel structure processing links for a long time. With the popularization of prefabricated buildings, the steel structure industry has good growth. In the past 21 years, the profitability of the company’s core manufacturing business increased year-on-year, and its competitive advantage was further strengthened. Maintain the company’s forecast of net profit attributable to the parent company from 2022 to 2023 of 1.508 billion yuan and 1.751 billion yuan, and increase the forecast of net profit attributable to the parent company in 2024 of 2.102 billion yuan. The current price corresponds to a dynamic P / E ratio of 15x in 2022. Firmly optimistic about the long-term value of Anhui Honglu Steel Construction(Group) Co.Ltd(002541) and maintain the “buy” rating.
Risk tip: the sharp fluctuation of steel price affects the company’s profitability, capacity expansion and utilization rate.
