\u3000\u3 China Vanke Co.Ltd(000002) 352 S.F.Holding Co.Ltd(002352) )
Core view
The performance forecast for the first quarter of 2022 is in line with expectations. In the first quarter of 2022, the company turned losses into profits compared with the same period of the previous year. It is expected to realize the net profit attributable to the parent company of 950-1.1 billion yuan (a year-on-year increase of 196% – 211%), deducting the net profit not attributable to the parent company of 850-1.0 billion yuan (a year-on-year increase of 175% – 188%). In March, some cities in China
Under the background of operation pressure caused by epidemic prevention and control, the company’s profit in the first quarter was stable and in line with expectations. The short-term impact of the epidemic is generally controllable, and multiple factors helped stabilize the performance in the first quarter. In March, some core cities in China, represented by Shanghai and Shenzhen, were sealed off due to the epidemic, resulting in challenges such as reduced operating efficiency and declining business volume. Superimposed on the impact of the company’s initiative to optimize the product structure and reduce the number of low margin products, we saw that the company’s overall business volume fell by 7.9% year-on-year in March. However, the company timely improved epidemic prevention and control measures in multiple links of collection, transfer, transportation and dispatch. Relying on the borrowing end-to-end diversified logistics service capacity, the company spared no effort to ensure the transportation and last kilometer distribution of residents’ living necessities during the epidemic. Up to now, the impact of the epidemic on the company’s operation is limited and controllable. The company achieved year-on-year turnaround in Q1 performance in 22 years, mainly due to: 1) actively optimizing the product structure and reducing the number of low gross profit products; 2) Adhere to lean cost control, improve input-output efficiency, improve the management of resource use efficiency by means of science and technology, continue to promote the integration of four networks, strengthen the integration of site and line resources, and strengthen the resource coordination across business sectors during the Spring Festival; 3) Year on year loss reduction of new business; 4) The results of Kerry Logistics have been consolidated since the fourth quarter of 2021.
The company continued to optimize its own operation and developed steadily in 2022. At this stage, the company’s overall capacity is sufficient and will be able to meet the needs of business development for a long time in the future. We expect that the company’s capital expenditure will begin to decline and the asset utilization rate will increase in 2022. Considering the repeated epidemics in many places across the country since March and the challenges of China’s economic environment, the main tone of the company’s development this year is steady. We expect that the company’s aging express delivery throughout the year is expected to achieve steady growth. At the same time, the company will continue to enjoy the cost optimization benefits brought by four networks financing and refined operation, and its performance is expected to be significantly repaired in 2022. In the context of the epidemic, the irreplaceable nature of SF logistics services has been strengthened, and the company still has a strong moat.
Risk tip: the epidemic situation in China has deteriorated; Oil prices rose more than expected; The growth of aging express was lower than expected.
Investment advice: maintain the profit forecast and maintain the “buy” rating.
Maintaining the profit forecast, it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 73.6/103.7/13.6 billion respectively, with a year-on-year increase of 72% / 41% / 31% respectively. Through the segment valuation method, it is concluded that the reasonable valuation of the company in the next six months is about 60.1-62.2 yuan. The long-term growth logic of the company remains unchanged and the “buy” rating is maintained.
