\u3000\u3 China Vanke Co.Ltd(000002) 011 Zhejiang Dun’An Artificial Environment Co.Ltd(002011) )
Event: in 2021, the company achieved an operating revenue of 9.837 billion yuan, a year-on-year increase of + 33.28%, a net profit attributable to the parent company of 405 million yuan and a turnaround from loss to profit. Q4 company achieved an operating revenue of 2.463 billion yuan, a year-on-year increase of + 13.35%, and a net profit attributable to the parent company of 63 million yuan.
Refrigeration business: Q4 refrigeration valve sales hit a new high.
In terms of products, the company’s refrigeration accessories business grew rapidly. In 21 years, the revenue of refrigeration accessories / refrigeration equipment / energy-saving industry / other businesses was 78.09/14.93/0.18/517 million yuan respectively, with a year-on-year increase of + 45.9 / – 2.8 / – 71.7 / + 20.3% respectively
Further split, Q4 company’s domestic sales of household refrigeration valves reached a new high. The sales volume of stop valve / four-way valve / electronic expansion valve were + 11.2 / + 53.0 / + 29.5% year-on-year respectively, and the market share reached 40.5 / 48.7 / 27.4% respectively, increasing by 1.8/11.2/3.3pct respectively compared with 20q4. The company maintains the world’s first market share in four-way valves, globe valves, small pressure vessels and system integration pipeline components, and the electronic expansion valve ranks second in the world.
Thermal management business: the thermal management revenue of Dunan automobile in 21 years was 57.56 million yuan, a year-on-year increase of + 136.78%, and the net profit was -123437 million yuan. The company increased the development of new energy vehicle thermal management system, completed the development of vehicle fbev electronic expansion valve, filled the gap in the industry and improved the competitiveness of the company’s thermal management accessories products. It has become a partner of Byd Company Limited(002594) , Weilai, ideal and other main engine plants, Valeo, air conditioning international, Marelli, Sandian and other vehicle air conditioning plants and new forces of heat management such as yinlun and Tuopu.
The adjustment of product structure has achieved remarkable results, and the profitability has improved in the second half of the year. In 21 years, the company achieved gross profit margin of 16.30%, year-on-year -0.67pct, and 21h2 achieved gross profit margin of 16.81%. Considering the adjustment of freight accounting standards, the same caliber year-on-year -0.13pct; The gross profit margin of Q4 is 16.21%, and the same caliber is expected to be + 0.72pct year-on-year.
In terms of regions, the Chinese business benefited from the adjustment of the company’s product structure in 21 years, and the proportion of products with high gross profit level such as commercial valves and electronic expansion valves increased. The gross profit margin of Chinese business increased by 0.79pct to 16.38% year-on-year under high cost pressure, and the gross profit margin of 21h2 reached 17.48%, up by 1.4pct year-on-year; Since the price of overseas orders cannot be adjusted in time, the profitability is seriously damaged. The gross profit margin of 21h2 is 15.94%, down 7.98pct year-on-year, and the gross profit margin of 21h2 is 12.96%, down 2.2pct year-on-year. The company has renegotiated the price with overseas customers in Q4. It is expected that the company’s overseas profitability will be significantly repaired in 22 years.
In terms of products, affected by the rising cost of raw materials and pricing strategy, the gross profit level of refrigeration accessories of the company decreased by 1.37pct to 15.86% year-on-year, and the gross profit margin of refrigeration equipment decreased by 23.77%, slightly by 0.2pct.
Internal cost reduction and efficiency increase, and financial expenses are significantly reduced. The company strengthened internal management, reduced costs and increased efficiency. The annual sales / management / R & D / financial expense ratio was -0.93 / – 1.06 / – 0.26 / – 1.09pct year-on-year respectively, and the Q4 sales / management / R & D / financial expense ratio was + 0.80 / + 1.65 / – 0.73 / – 1.25pct year-on-year. The significant reduction in financial expenses mainly benefited from the reduction of interest bearing debt caused by the repayment of bank loans and financial leasing. The annual interest expenditure was about 114 million yuan, a significant decrease of 51 million yuan compared with the same period in 20 years. According to the debt repayment arrangement of the company’s reply to the inquiry letter of Shenzhen Stock Exchange, 380 / 61 / 650 million yuan should be repaid in 21, 22 and 23 years respectively. We expect that the interest expenditure in 22 years will still decline significantly, and the financial operation condition is expected to continue to improve. At the same time, the asset liability structure of the company has been significantly improved, and the asset liability ratio is 80.20%, which is lower than 84.99% in 20 years.
The operating efficiency was effectively improved and the operating cash flow increased significantly.
1) at the end of 21 years, the company’s cash + other current assets totaled 1.13 billion yuan, a year-on-year increase of – 31.2%, mainly due to the company’s repayment of bank loans and financial leases; Notes and accounts receivable totaled 1.15 billion yuan, a year-on-year increase of + 7.6%; Contract liabilities were 110 million yuan, a year-on-year increase of – 1.4%; In order to cope with the rise of raw materials, the company actively prepared goods. At the end of 21 years, the company’s inventory totaled 1.48 billion yuan, a year-on-year increase of + 19.6%, of which the ending balance of raw materials / products in process / products in inventory was + 28.1 / + 45.9 / + 10.9% year-on-year respectively.
2) from the perspective of turnover, the turnover days of inventory / accounts receivable / accounts payable of the company are -5.55 / – 27.19 / – 18.43 days respectively, which effectively improves the overall operation efficiency.
3) the net cash flow from operating activities in 21 years was 633 million yuan, a year-on-year increase of + 44.98%, which was mainly due to the substantial growth of the company’s main business revenue and solid statement quality.
Profit forecast and investment rating: we are optimistic about Dunan’s long-term development pattern of “refrigeration + heat management”. Gree’s acquisition will accelerate to help the company solve the guarantee problem, and the company’s asset liability structure will be effectively improved. In the future, relying on Gree’s platform resources, it is expected to realize the integration with Gree’s industrial chain and accelerate the development of heat management business. The possible one-time profit rollback caused by debt guarantee settlement is not considered for the time being. We expect the company’s revenue to be 10.491/11.702/13.029 billion yuan from 2022 to 2024, with a year-on-year growth rate of 6.7/11.5/11.3%; The net profit attributable to the parent company was RMB 550 / 690 / 840 million, with a year-on-year growth rate of 35.2 / 25.5 / 21.6%; Corresponding to pe15 5/12.3/10.1。 Maintain the “buy” rating.
Risk factors: the price of raw materials rises sharply, the development of customers in thermal management business is less than expected, the development of commercial refrigeration business is less than expected, the share of refrigeration parts decreases, the demand for downstream air conditioning is weak, etc
