\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 058 Sailun Group Co.Ltd(601058) )
Event: on April 1, 2022 Beijing time, Sailun Group Co.Ltd(601058) released the annual report of 2021. The annual report showed that in 2021, the company achieved an operating revenue of 17.998 billion yuan, a year-on-year increase of 16.84%; The net profit attributable to shareholders of listed companies was 1.313 billion yuan, a decrease of 11.97% over the same period of last year; A total of 453977 million tires were produced, with a year-on-year increase of 6.56%, and 436197 million tires were sold, with a year-on-year increase of 4.98%. comment:
Under the internal and external difficulties, Q4 net profit rebounded and its market share continued to increase. According to the company's annual report, in 2021, the company realized an operating revenue of 17.998 billion yuan, a year-on-year increase of 16.84%, under the influence of various adverse factors such as rising freight, rising raw material prices and the epidemic in Vietnam. The output of tires was 453977 million, a year-on-year increase of 6.56%, and the sales volume of tires was 436197 million, a year-on-year increase of 4.98%. At the same time, the company maintained the increase of production, sales and sales revenue, and further increased its share in the global tire market. In terms of net profit, in 2021, the company realized a net profit attributable to shareholders of listed companies of 1.313 billion yuan, a decrease of 11.97% over the same period of last year. However, in terms of quarters, the profits in the four quarters were 403 million yuan, 307 million yuan, 306 million yuan and 326 million yuan respectively. Since the second quarter of 2021, the sharp rise of international shipping charges and the shortage of container capacity led to the decline of the company's profits in a single quarter. In the third quarter, in addition to the above factors, the rebound of the epidemic in Vietnam led to the decline of the company's factory operating rate in Vietnam. The company's profits in the third quarter were basically the same as those in the second quarter. In the fourth quarter, The company's net profit has stopped falling and rebounded. It should be noted that from the perspective of single quarter profit over the years, since the fourth quarter and the first quarter are usually the off-season sales of the tire industry, and the profit is usually relatively lower than that in the third quarter, the month on month growth of the company's profit in the fourth quarter further proves that the company has seized the opportunity in the external difficulties and achieved performance growth.
In terms of sea freight, the pressure of sea freight is expected to subside. In 2021, ship exports faced difficulties such as port congestion and container shortage, and sea freight rose sharply. The pressure of shipping in 2021 is reflected in the difficulty of obtaining transportation capacity and the rise of freight, which have a great negative impact on Sailun Group Co.Ltd(601058) operation. In 2022, we observed that the port congestion in the United States is easing faster than the market expected, the shipping cycle between China and the United States is returning to normal, and the shortage of transportation capacity will be repaired. Maersk, the world's largest container shipping company, released its financial report on February 9, 2022 and realized a net profit before interest, tax, depreciation and amortization of US $24 billion in 2021. It is expected that the current market situation will continue until the second quarter of 2022 and gradually return to normal in the second half of this year. Based on these assumptions, Maersk expects the full year EBITDA of 2022 to be US $24 billion (the same as that in 2021). Therefore, we believe that the freight factor that has an important impact on the company's profits in 2021 will be significantly improved in 2022.
In terms of raw materials, the price of rubber has fallen. From the average market price of natural rubber in Baichuan in recent three years, the price peak in recent three years appeared in February and March of 21 years, and the prices reached 14633 and 14392 yuan / ton respectively. In the first four months of 22 years, the price of natural rubber decreased compared with the same period last year, and the short-term tight pattern of natural rubber supply and demand has been improved. In addition, despite the sharp rise in the prices of crude oil and coal in the upstream, the price rise of synthetic rubber, the main raw material of tires, is relatively small. The company's synthetic rubber is mainly purchased from PetroChina. From the perspective of purchase price and preparation difficulty, the current price is relatively stable, there is no preparation pressure, and the transmission of crude oil price to synthetic rubber is not direct. Overall, the company's pressure on raw materials is expected to decline steadily.
The shackles of the epidemic in Vietnam were lifted and the profits of overseas factories recovered. In Q3 of 21, the epidemic situation in Vietnam was out of control under the background of the rampant delta mutant strain and the relaxation of epidemic prevention measures. The introduction of "factory isolation" measures in some regions had a great impact on China's economy and society. The Vietnam index of Ho Chi Minh stock exchange fell rapidly from 1420 points on July 2, 2021 to 1244 points on July 19, 2021. The company's Vietnam factories were also affected by the epidemic prevention and control policies, and the capacity utilization rate decreased month on month. Subsequently, Vietnam adjusted from the "zero infection" strategy to the "new normal" strategy of epidemic prevention and control. At the same time, it also received assistance from China and other countries. In Q4 of 21, the economic impact of Vietnam epidemic was curbed, China resumed production and export, and the Vietnam index of Ho Chi Minh stock exchange continued to rise, returning to 1423 points before the impact of this wave of epidemic on October 27. With the improvement of the epidemic situation in Vietnam, the capacity utilization rate of the company's Vietnam factory has improved significantly, which is not only significantly higher than Q3 in 21 years, but also higher than the first two quarters of 21 years, realizing a breakthrough recovery. In Q1 22, Vietnam removed covid-19 pneumonia from the list of class A infectious diseases and classified it as class B infectious diseases. It began to resume regular international flights and further fully resume international tourism. In combination with the epidemic situation in Vietnam and the company's performance in Vietnam, it is expected to fully contribute to the company's production capacity and break through the storm in the future.
The pace of production expansion is accelerated, and it is expected to continue to expand its advantages. At present, the company has four factories in Qingdao, Dongying, Shenyang and Weifang. At present, the actual annual production capacity is 7.3 million all steel tires, 34.5 million semi steel tires and 50000 tons of off-road tires; There are two overseas production bases in Vietnam and Cambodia. At present, the actual annual production capacity is 4.25 million all steel tires, 12.5 million semi steel tires and 50000 tons of off-road tires. According to the company's production capacity planning, the company currently has production capacity under construction outside China, and the projects under construction in China are expected to reach production in 22 years. The annual production capacity will increase by 2.4 million all steel tires, 8.5 million semi steel tires and 10000 tons of off-road tires. Overseas Vietnam phase III (1 million all steel tires, 4 million half steel tires and 50000 tons of off-road tires) and Cambodia project (1.65 million all steel tires and 9 million half steel tires) are expected to be completed in 23 years. The Cambodian all steel tire project newly laid out by the company in March 2022 is located in the south of Cambodian Highway 1. There is no need to open the cabinet for inspection when passing through Vietnam. The company can make full use of the existing tire production technology and human and material resources, combined with the characteristics of Cambodia's own low tax rate, improve the company's international market share and help the company occupy a more favorable competitive position.
Liquid gold products continued to advance. In November, German t ü V Rhine released the real vehicle test results with a test cycle of one month and more than 10000 kilometers at the 4th China International Import Expo: the comprehensive fuel consumption of liquid gold tires per 100 kilometers is 18.26% lower than that of similar products with the best feedback from international first-line brands in China's heavy truck market, and 16.56% lower than that of similar products with the best feedback from Chinese first-line brands in China's heavy truck market, It is 11.24% lower than the main sales of similar products of Chinese first-line brands in the supporting market.
In December, the company cooperated with Guangdong new energy vehicle development service center and Shenzhen Nanshan Transportation Co., Ltd. to carry out the Shenzhen green travel road test. Four new energy taxis were selected for this test. The test results showed that the power consumption of liquid gold tires per 100 kilometers was 12.26% lower than that of their original matching tires (corresponding to power saving of 2.04 degrees). The measured results of the company's liquid gold tire products, whether in all steel or semi steel, in fuel vehicles or in new energy vehicles, have been highly recognized by the market. In 2022, the company's liquid gold products are expected to further increase the market share and make some gains in overseas markets.
Profit forecast and investment rating: we expect the company's operating revenue to reach 23.631 billion yuan, 28.320 billion yuan and 33.838 billion yuan respectively from 2022 to 2024, with a year-on-year increase of 31.29%, 19.84% and 19.48%. The net profit attributable to the shareholders of the parent company is 1.898 billion yuan, 2.808 billion yuan and 3.988 billion yuan respectively, with a year-on-year increase of 44.54%, 47.95% and 42.04%. The diluted EPS from 2022 to 2024 will reach 0.62 yuan, 0.92 yuan and 1.30 yuan respectively. The corresponding PE in 2022 is 16 times, giving a "buy" rating.
Risk factors: 1. The new production capacity is not put into operation as expected. 2. The risk of sharp fluctuations in rubber prices.
