\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 636 Zhuzhou Kibing Group Co.Ltd(601636) )
Key investment points
Event: the company disclosed that in the first quarter report of 2022, Q1 achieved a total operating revenue of 3.063 billion yuan, a year-on-year increase of + 4.8%, and a net profit attributable to the parent company of 522 million yuan, a year-on-year increase of - 40.7%, lower than our expectation.
Q1 revenue and gross profit margin were + 4.8% / - 17.3pct year-on-year respectively, and the cost side continued to be under pressure. (1) The revenue side of Q1 increased slightly year-on-year, which is expected to be mainly due to the year-on-year rise in the price of the original film. Since the beginning of 2022, the price of building glass has increased first and then decreased. In the early stage, due to the early preparation price of downstream processing plants and traders, but affected by the delay in the recovery of building glass demand after the festival, the price of warehouse has increased and decreased. (2) The gross profit margin decreased by 17.3pct year-on-year to 34.4% and 3.2pct month on month, slightly exceeding our expectations, due to the sharp rise of unit cost under the influence of soda ash and fuel prices. Considering the large reserve of bulk materials in the early stage of the company, the cost impact may be less than that of the same industry.
During the period, the cost rate was slightly compressed. The company's Q1 expense rate decreased by 1.7pct to 15.0% year-on-year, mainly due to the reduction of R & D expense rate and financial expense rate by 1.0pct/0.9pct to 3.8% and 0.2% respectively. The reduction of financial expense rate was due to the increase of interest income and the decrease of exchange loss caused by the increase of monetary capital.
The decline of operating cash flow is mainly related to the centralized payment of various taxes, the continuous expansion of capital expenditure and the decline of debt ratio. The company's net cash flow from Q1 operating activities decreased by 104.1% year-on-year to -35 million yuan. In addition to the decline in profits, it was mainly due to the company's payment of various taxes deferred in the early stage of the epidemic, the payment of various taxes increased by 83.7% year-on-year, and the cash paid to / for employees increased by 38.4% year-on-year. The cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets in Q1 was 389 million yuan, a year-on-year increase of 26.5%, reflecting the accelerated layout of photovoltaic glass and silica sand. The company's asset liability ratio in the first quarter report of 2022 was 34.5%, a month on month decrease of 1.1pct compared with the annual report of 2021, and the balance of interest bearing debt was 3.446 billion yuan, an increase of 640 million yuan compared with the annual report of 2021, mainly due to the increase of long-term borrowings.
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. Subsequently, with the arrival of the seasonal construction peak season, the terminal demand is expected to improve and the price will rebound. However, the improvement of the capital situation of the real estate chain is still an important factor affecting the demand intensity. If the glass production line is superimposed to accelerate the cold repair, the price recovery will be more sustainable and flexible. 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.
New business continues to expand, and the company's medium and long-term growth appears. In addition to the continuous growth of deep processing, the expansion of photovoltaic glass, medicinal glass and electronic glass has accelerated, and the competitiveness of the industry has gradually increased. The medium and long-term growth of the company has been improved, and the high red rate has brought a certain margin of safety. At the same time, it is expected to enjoy the increase of valuation premium brought by growth.
Profit forecast and investment rating: due to the lower than expected repair demand at the end of short-term completion, we adjusted the forecast of the company's net profit attributable to the parent company from 2022 to 2024 to 31.4 (- 6%) / 42.9 (+ 1%) / 47.3 (+ 1%) billion yuan, corresponding to 1.17/1.60/1.76 yuan of EPS from 2022 to 2024, and the current market value corresponds to 11.1/8.2/7.4 times of PE from 2022 to 2024, maintaining the "overweight" rating.
Risk tip: repeated macro policies, unexpected increase in industry supply, and sharp fluctuations in raw material prices.
