\u3000\u3 China Vanke Co.Ltd(000002) 271 Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) )
Event:
The company released its annual report for 2021, and achieved an operating revenue of 31.934 billion yuan, an increase of 46.96% at the same time; The net profit attributable to the parent company was 4.205 billion yuan, an increase of 24.07% at the same time; Deduct the net profit not attributable to the parent company of RMB 3.867 billion, an increase of 25.10% at the same time. In the fourth quarter alone, the company’s revenue was 9.252 billion yuan, an increase of 37.01% at the same time; The net profit attributable to the parent company was 1.527 billion yuan, an increase of 21.32% at the same time; Deduct the net profit not attributable to the parent company of RMB 1.399 billion, an increase of 32.23% at the same time. The company announced the profit distribution plan for 2021, and distributed a cash dividend of 3 yuan (including tax) for every 10 shares, with a cash dividend ratio of 17.97%.
Comments:
Overcome the pressure of rising costs, the performance is in line with expectations, and the business quality remains stable. During the reporting period, the business of the company expanded smoothly, the sales volume of main products increased, and the scale of material sales business and construction service business increased. However, the price of petrochemical products such as asphalt, polyether, polyester tire, chain extender, emulsion, MDI and SBS modifier increased with the increase of crude oil price. The operating cost of the company increased by 62.16% at the same time, which was greater than the revenue, resulting in a year-on-year decrease of 6.51pct to 30.53%. However, the overall profitability is still in line with expectations.
The company continued to practice high-quality development. In 2021, the net cash flow from operating activities was 4.1 billion yuan, an increase of 4.12% year-on-year; The cash to cash ratio is 1.11; The net cash ratio is 0.98. At the same time, the performance bond was effectively recovered. By the end of 2021, other receivables (mainly performance bond) had decreased to 878 million yuan, compared with 4.036 billion yuan at the end of the third quarter.
The increasing trend of industry concentration remains unchanged, and the stronger the company is. In 2021, the main business income of waterproof Enterprises above designated size was 126159 billion yuan, an increase of 13.2% at the same time, and the growth rate was 8.6pct higher than that in 2020; The total profit reached 7.564 billion yuan, down 2.04% at the same time, and the growth rate was 14.11 PCT lower than that in 2020. The industry concentration is still increasing, and as the absolute leader of the industry, the company’s revenue and profit growth are far higher than the industry average. The industry is about to usher in the implementation of the general code for waterproofing of building and municipal engineering (i.e. the new waterproof regulations), which will clarify the requirements for the working life of waterproof design under different use environments. On the one hand, it will improve the requirements of downstream customers for product performance, and prefer to choose head enterprises with large brands, guaranteed quality and long duration. On the other hand, it is also expected to increase the amount of waterproof materials per unit construction area. The effect will be the double rise of industry demand and concentration.
The organizational structure reform continues to exert its power, and the expansion of non real estate business is worth looking forward to. In the engineering market, the company has formed a multi-dimensional marketing network combining the direct selling mode and the engineering channel dealer mode. The company and business department are responsible for sales in the three regions of North China, East China and South China and special fields focusing on railway, urban rail transit, industrial construction, energy construction, underground engineering and other professional market segments. The three regions are under the jurisdiction of provincial and regional integrated operation companies and centralized procurement business departments. The centralized procurement business department focuses on serving large-scale national strategic cooperation customers, and the regional integration companies are responsible for the sales and service of the company’s products in the local engineering market. During the reporting period, the company continued to implement and deepen the integrated operation of provinces and regions, deeply integrate and cooperate with direct sales and engineering channels, break channel barriers and fully integrate the advantageous resources of local customers and markets, so as to further improve the market share.
In 2021, the company increased its sales and promotion efforts in non real estate fields such as infrastructure construction, urban emerging infrastructure and industrial, mining, warehousing and logistics, and achieved fruitful results. It will become an important part of the company’s business territory in the future. For the traditional real estate business, while ensuring the operation quality and controlling risks, the company is also consolidating and developing the strategic cooperation of high-quality real estate companies.
The civil construction group has developed rapidly and has become an important growth pole: the civil construction group mainly focuses on the dual main business strategy of waterproof and moisture-proof system and paving beautiful seam system, focusing on the “TOC” business. During the reporting period, the company took many measures simultaneously, achieving an operating revenue of 3.79 billion yuan, a year-on-year increase of 93%. 1) Promote the member management platform of honggehui, focus on the member operation of professionals, and increase the pull and guidance of terminal consumption. 2) Implement channel sinking, continue to develop outlets and expand coverage. By the end of the reporting period, there were nearly 4000 dealers, more than 100000 distribution outlets and more than 20000 distribution outlets (including image stores). 3) Actively explore new forms of Internet business and enable new retail. In 2021, the revenue of waterproof coatings will increase by 50%, and the revenue of waterproof coiled materials, ceramic tile adhesive, sealant and other categories will double. In the future, as the company continues to adhere to the policy of giving priority to civil construction and realizing the great acceleration of civil construction, the sector is still expected to maintain high-speed growth. Multi category expansion and continuous opening of the growth ceiling: relying on the synergy of customer resources and sales channels accumulated in the main waterproof industry and good brand influence, the company quickly cuts into the non waterproof business sectors represented by architectural coatings, such as special mortar, building powder, energy conservation and temperature protection, building repair and other fields, in order to provide customers with more perfect building materials system solutions. In addition, the company has extended to the upstream industry, actively layout upstream industries such as nonwoven fabrics, special films, VAE emulsion, etc., mainly as the raw materials of Grandpa’s main business, thus playing a role in ensuring supply safety and stabilizing procurement costs.
Profit forecast, valuation and rating: at present, the policy direction of stabilizing real estate is clear. When the epidemic situation is alleviated and the effectiveness of policy transmission is brought into play, it is expected to see the inflection point of real estate fundamentals, and then consumer building materials will also usher in real allocation opportunities Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) the competitive advantage in the market has not changed fundamentally, and the ability to resist risks is stronger. After this cycle, the advantage may be more obvious. Moreover, the company actively optimized its organizational structure and vigorously expanded its non real estate business, with high performance certainty. As the current pressure on the cost side has not been significantly relieved, we slightly lowered the company’s forecast of net profit attributable to the parent company in 22-23 years to 5.272 billion yuan and 6.401 billion yuan respectively (down 2.59% and 1.39%), and gave the company a forecast of net profit attributable to the parent company in 24 years to 7.685 billion yuan. Based on the confidence in the company’s long-term growth, we maintained the “buy” rating.
Risk tips: the downstream real estate enterprises are short of funds, the demand for waterproof materials is less than expected, the cash flow deteriorates again, the upgrading range of waterproof material standards is less than expected, the price of raw materials in the petrochemical industry chain rises, etc.
