\u3000\u3 China Vanke Co.Ltd(000002) 541 Anhui Honglu Steel Construction(Group) Co.Ltd(002541) )
The volume and price of products have risen simultaneously, and the performance has increased. Y + 1.15 billion / year net profit of Yo + 1.45 billion / year. The continuous release of steel structure manufacturing capacity and the improvement of capacity utilization have driven the high growth of performance.
Production and sales increased steadily, and the fluctuation of steel price affected the gross profit margin. In 21 years, the production / sales volume of steel structure is 3387 / 3.18 million tons, yoy + 35.2% / 28.7%. According to our estimation, the capacity utilization rate is 87%. By the end of the 21st century, the production capacity had reached 4.2 million tons, and it is planned to increase to 5 million tons by the end of the 22nd century. We estimate that the average price / cost / gross profit per ton of steel structure products is 5629 / 5076 / 553 yuan, a year-on-year increase of + 768 / + 781 / – 13 yuan; The gross profit margin of steel structure processing was 9.83%, down 1.81pct year-on-year. Although the product pricing mechanism is mainly based on the steel price (1 + reasonable gross profit margin) model, and lock in the cost of raw materials through timely procurement after receiving the first deposit, so as to avoid the fluctuation of gross profit margin caused by steel price as far as possible. However, due to the constraints of management accuracy / capital turnover, 100% implementation cannot be guaranteed, resulting in partial risk exposure. During the period, the company increased the purchase volume to resist the subsequent price rise risk. At the end of the period, the inventory of raw materials was 6.47 billion and the reserve was sufficient.
Capacity advantage is building its moat in an all-round way. The company has the perfect semi-finished product manufacturing capacity that competitors do not have, which can reduce the intermediate links from purchasing steel sectors from steel mills to semi-finished products made by other enterprises, and then to finished products made by steel structure factories. On the purchasing side, since all materials are purchased and sold by the headquarters, large-scale procurement improves the bargaining power between the company and the steel plant, and because the monthly procurement volume is relatively stable, it solves the orderly production of the steel plant when the demand for steel is weak, so the certainty of steel supply is higher. On the production side, in the past 21 years, the company has realized BIM management of the whole production process, and can scan the QR code on the components to view the detailed information of component materials / installation, which facilitates the installation of customers. Based on the top ten production bases, it has outstanding advantages in undertaking large-scale projects. In 21 years, it has undertaken large orders of more than 100 million yuan or 10000 tons, with an amount of 4.747 billion, yoy + 97.7%. In addition, the new contracts signed by the company in 21 years are material orders.
The processing capacity of steel structure is far from saturation, and the supporting products of steel structure fabricated buildings should be improved. We assume that the annual sales volume of steel structure manufacturing is 5 million tons, which is the target for the next two years, and there is still 57% growth space. This is just an increase in quantity. In terms of improving order structure / reducing production costs / accelerating intelligent transformation, unit profit still has great potential to be tapped. In addition, the company has increased R & D and investment in green building materials such as reinforced truss floor support sector / external wall thermal insulation and decoration integrated sector / cold-formed thin-walled section steel / doors and windows / PC accessories, so as to enrich the product line and improve competitiveness.
Forecast of eps2 in 22-24 years 41 / 3.21/3.83 yuan (the original value was 3.23/4.31 yuan in 22 / 23 years). Due to the unexpected fluctuation of steel price, the gross profit margin was mainly revised down. The 22-year average of comparable companies is 17xpe. As the company’s capacity is still in the process of continuous release, the performance growth rate in 23 years is higher than that of comparable companies. It is recognized that the company is given a 25% valuation premium to 21x, corresponding to the target price of 50.61 yuan, maintaining the rating of “overweight”.
Risk tip: the price of raw materials fluctuates, the penetration rate of prefabricated buildings is lower than expected, and the capacity expansion is lower than expected.