\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 636 Zhuzhou Kibing Group Co.Ltd(601636) )
Key investment points
Event: the company disclosed in the annual report of 2021 that the annual operating revenue was 14.573 billion yuan, a year-on-year increase of 51.1%, and the net profit attributable to the parent company was 4.234 billion yuan, a year-on-year increase of 133.4%. In the fourth quarter, the operating revenue in a single quarter was 3.807 billion yuan, a year-on-year increase of 23.3%, and the net profit attributable to the parent company was 575 million yuan, a year-on-year decrease of 3.8%. The company plans to pay a cash dividend of 8.0 yuan for every 10 shares, with a cash dividend ratio of 50.7%.
The real estate capital chain dragged down the demand for building glass, and the growth rate of revenue and profit in Q4 fell. In the second half of 2021, due to the slowdown of construction, the shortage of funds in the industrial chain and other factors, the terminal demand weakened significantly, and the building glass boom went down more than expected in the fourth quarter. We estimate that the sales volume of the company’s original float film decreased by 7.3% year-on-year in the second half of 2021, and the corresponding comprehensive average price, gross profit and net profit per unit heavy container were 134 yuan, 64 yuan and 35 yuan respectively, with a year-on-year increase of 41 yuan, 25 yuan and 14 yuan. The difference is mainly due to the rise of the cost affected by the price of raw fuels such as soda ash. (2) The revenue in Q4 increased by 23.2% year-on-year, decreased by 4.5% month on month compared with Q3, and the gross profit margin in Q4 was 37.6%, decreased by 20.0pct month on month, which was affected by both price and cost.
The cost side continues to increase with the vigorous expansion of the company. In the second half of 2021, the cost of a single box was 19.9 yuan, with a year-on-year increase of 7.1 yuan, of which the cost of equity incentive and exchange loss affected the cost of a single box by 3.1 yuan and 0.1 yuan. Excluding the above two items, the cost of single box period is 16.5 yuan, with a year-on-year increase of 4.9 yuan, of which the management cost is mainly due to the increase of accrued performance reward.
The net operating cash flow continued to grow at a high rate, the reserve of bulk materials increased, and the debt ratio remained stable. The net cash flow generated from the company’s operating activities in 2021 was RMB 5.073 billion, with a year-on-year increase of 62.7%, which was lower than the profit growth, mainly due to the increase of inventory due to the strategic preparation of bulk materials and the inventory of finished products. The cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets was 1.446 billion yuan, a year-on-year increase of 25.6%, reflecting the accelerated construction of the company’s photovoltaic glass and placer projects. The asset liability ratio of the company’s annual report in 2021 was 35.5%, with a year-on-year increase of 2.0pct.
The short-term social inventory has been at a relatively low level. In the follow-up, we will pay attention to the improvement of terminal demand and look forward to the improvement of glass’s long-term profit center in the medium and long term. The short-term social inventory has fallen to a phased low, and the inventory upward has slowed down. With the arrival of the seasonal construction season, the terminal demand is expected to improve, but the improvement index of the capital situation of the real estate chain is still an important factor affecting the demand intensity. If the superimposed glass production line accelerates the cold repair, the price recovery will be more sustainable. In the long run, based on the constraints of new production capacity and the long-term demand potential of building glass, the long-term capacity utilization center of glass is expected to remain high, supporting the improvement of the boom center.
The layout of photovoltaic glass is accelerated, and the capacity release of new sectors is expected to contribute to the performance increment. According to the company’s new announcement, a total of 5 1200t / D photovoltaic glass production line will be built in Fujian and Yunnan bases, and silica sand mining projects will be invested in Yunnan. Prior to this, the photovoltaic high permeability material production line projects and supporting placer projects in Chenzhou, Hunan, Zhangzhou, Fujian and Ningbo, Zhejiang have gradually entered the production period, and the increment of photovoltaic glass business is expected to be released gradually. The second phase construction of electronic glass and medicinal glass will also enhance the competitiveness of the company in the industry, and its profitability is expected to be improved.
Profit forecast and investment rating: high profit rate provides a certain margin of safety, while enjoying the increase of valuation premium brought by growth. We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 3.34 billion, 4.26 billion and 4.7 billion respectively, corresponding to 10.8, 8.5 and 7.7 times P / E ratio. The company is rated as “overweight” for the first time.
Risk tip: the risk of repeated macro policies, unexpected increase in industry supply and sharp fluctuation in raw material prices.
