\u3000\u3 China Vanke Co.Ltd(000002) 949 Shenzhen Capol International&Associatesco.Ltd(002949) )
Matters: the company released its annual report for 2021, and achieved an operating revenue of 2.876 billion yuan in 2021, with a year-on-year increase of 51.87%; The net profit attributable to the shareholders of the listed company was 105 million yuan, a year-on-year decrease of 39.20%. Realize basic eps0 54 yuan / share.
The proportion of EPC increased with high business growth, and the provision for impairment dragged down the growth of performance. The company’s operating revenue increased by 51.87% year-on-year in 2021, of which the design business and EPC business achieved revenue of 1.539 billion yuan and 1.086 billion yuan respectively, yoy + 24.67% / 137.36%, and the cost business achieved revenue of 227 million yuan, yoy + 34.37%. During the period, the company’s EPC business increased significantly, or most of the new large-scale EPC projects undertaken by the company in 2020 were converted into revenue in 2021. The company’s design / EPC revenue accounted for 53.49% / 37.77% respectively, with a year-on-year increase of -11.66 / + 13.60 PCT, and the proportion of EPC increased significantly. During the period, the company’s net profit attributable to the parent decreased by 39.20% year-on-year, or mainly due to the increase in labor costs and the increase in the proportion of low gross profit EPC, which affected the overall gross profit margin. At the same time, the company made sufficient impairment provision for some project receivables. During the period, the company’s credit impairment loss was as high as 131 million yuan, compared with only 25 million yuan in the same period last year.
The change of business structure affects the level of gross profit margin, and the performance of operating cash flow is excellent. During the period, the gross profit margin of the company decreased by 5.46 PCT year-on-year to 20.88%, of which the gross profit margin of design / EPC / cost business was 31.75% / 2.68% / 34.94% respectively, with a year-on-year decrease of – 1.57 / – 2.17 / + 2.54 PCT respectively. The gross profit margin of the company’s main design business decreased or the revenue of low gross profit EPC business increased sharply due to the increase of labor cost, the proportion increased significantly, and the overall gross profit margin decreased. The gross profit margin of the company decreased to – 54.5% year-on-year due to the impairment level of PCT and net profit margin in 2024. During the period, the company’s operating cash flow realized a net inflow of 238 million yuan. In recent five years, the company’s cash flow was in a net inflow state. Under the background of capital pressure in the real estate industry and the company’s large impairment provision, the company’s cash to income ratio still improved, reflecting strong development toughness.
The volume of newly signed units is abundant, the prefabricated design maintains rapid growth, and the per capita output value has increased significantly. In 2021, the newly signed contracts of various businesses of the company were: design 2.436 billion yuan (YoY + 5.08%), cost consulting 451 million yuan (YoY + 27.25%), and whole process consulting 156 million yuan. The newly signed contracts of the three businesses amounted to 3.043 billion yuan, which was 1.06 times of the revenue in 2021. The company’s assembly design business maintained a rapid development trend. On the basis of the high base in 2020, the revenue of assembly design increased by 52.38% year-on-year, and the newly signed contract was 1.086 billion yuan, with a year-on-year increase of 17.93%, accounting for 44.60% of the design sector (year-on-year + 4.86 PCT). The per capita output value of the company in 2021 was 5.561 billion yuan, a significant increase of 172800 yuan / year compared with 2020. If excluding the EPC business revenue, the per capita output value of the company in 2021 / 2020 was 2.907 billion yuan / 3.460 billion yuan respectively. The number of employees of the company in 2021 increased by 4.70% year-on-year (year-on-year – 20.84 PCT), the scale of personnel expansion slowed down, and the effect of human efficiency improvement was obvious.
The competitiveness of affordable housing projects is outstanding, and the transformation of construction technology is advancing steadily. Affordable housing construction is one of the key construction contents during the 14th Five Year Plan period in China. As a leader in the design and construction of affordable housing in Shenzhen, the company has long participated in the formulation of design standards for affordable housing in Shenzhen, undertaken the design and EPC projects of several affordable housing projects in Shenzhen, established long-term close cooperative relations with government agencies, and developed affordable housing product system based on assembly technology and put it into use, Superimposed with the technical ability of assembly design, it will have significant comprehensive advantages in order contracting of affordable housing projects in the future. The company is one of the design enterprises that started BIM special research earlier in China, with BIM application experience in the forefront of the industry. In the field of BIM software R & D, the company plans to establish a joint venture with Zwsoft Co.Ltd(Guangzhou)(688083) China’s leading industrial software leader to jointly carry out the R & D and sales of domestic BIM software. The commercialization process of BIM software is expected to accelerate and help the company create new business growth points. The future scientific and technological transformation and long-term development are worth looking forward to.
Investment suggestion: the company is a high-quality private leader in the field of China State Construction Engineering Corporation Limited(601668) design. Its industry position is constantly improving and its high-quality customer resources are abundant. Based on architectural design, the company expands the length of business chain to the whole process consulting and EPC. At the same time, the level of assembly design and BIM application is leading in the industry, with significant advantages in customer resources and technical experience in the field of affordable housing. The company has abundant cash flow and sufficient orders on hand to support the release of future performance, and is expected to fully benefit from the promotion of new urbanization, construction industrialization and affordable housing construction. In 2021, the impairment provision of the company was relatively sufficient, which helped the young dress in 2022. At present, the policy margin of the real estate industry has improved, and the real estate chain design company is expected to usher in new action. It is estimated that the company’s revenue from 2022 to 2024 will be 3.296 billion yuan, 3.763 billion yuan and 4.337 billion yuan respectively, with a year-on-year increase of 14.6%, 14.2% and 15.2% respectively, and the net profit will be 250 million yuan, 314 million yuan and 3.5% respectively RMB 7.9 billion, a year-on-year increase of 136.8%, 26.0% and 20.5% respectively, EPS was RMB 1.27, RMB 1.60 and RMB 1.93 respectively, dynamic PE was 12.5 times, 9.9 times and 8.2 times respectively, Pb was 1.9 times, 1.6 times and 1.4 times respectively, maintaining the “Buy-A” rating.
Risk warning: macro economy fluctuates greatly; The epidemic control was not as expected; Policy promotion is less than expected; Decline in fixed investment; The revenue growth of the survey and design industry in the province was lower than expected; The proportion of revenue in Guangdong Province is lower than expected; The expansion outside the province is less than expected; The progress of construction technology business is less than expected; Loss of personnel; Decline in customers’ business conditions; Industry competition intensifies risks, etc.
