\u3000\u3 China Vanke Co.Ltd(000002) 271 Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) )
Event: the company released the annual report of 2021. The revenue reached 31.934 billion yuan, a year-on-year increase of 46.96%; The net profit attributable to the parent company was 4.205 billion yuan, a year-on-year increase of 24.07%. Among them, the revenue of 2021q4 was 9.252 billion yuan, a year-on-year increase of 37.01%; The net profit attributable to the parent company was 1.527 billion yuan, a year-on-year increase of 21.32%.
Q4 revenue increased against the market, and non housing and non waterproof businesses developed rapidly. Quarterly, Q1-Q4 revenue growth was 118.13% / 40.11% / 36.46% / 37.01% respectively. In the second half of the year, the company bucked the trend in the downward phase of the overall prosperity of the industry. In terms of business, the revenue of waterproof coiled material / waterproof coating / waterproof construction increased by 39.98% / 63.30% / 21.92% respectively in 2021, and non waterproof businesses such as architectural coating, mortar powder and thermal insulation materials developed rapidly. From the perspective of sub channels, the integrated company has developed rapidly, and the business development results of non real estate B and civil construction C are outstanding. In 2021, the operating revenue of the civil construction group was 3.79 billion yuan, an increase of 93% year-on-year.
During this period, the cost control was continuously optimized, and the cost pressure of Q4 was relieved month on month. The gross profit margin of the company’s sales in 21 years was 30.53%, down 6.51 percentage points year-on-year. The net profit margin of sales was 13.19%, down 2.4 percentage points year-on-year. The net profit margin of Q1-Q4 sales is 5.37% / 14.01% / 13.36% / 16.56% respectively. Q4 company’s sales net profit margin increased significantly month on month, mainly due to the month on month increase of Q4 gross profit margin and the write off of 188 million yuan of Q4 credit impairment loss. During the period, the company’s expenses continued to optimize. In 2021, the company’s sales expense rate was 6.94%, with a year-on-year change of -1.28pct; The management fee rate was 5.15%, with a year-on-year change of -0.65pct; The R & D expense ratio was 1.75%, with a year-on-year change of -0.38pct; The financial expense ratio was 0.73%, with a year-on-year change of -1.02pct.
Pay attention to the optimization of business quality, and significantly accelerate the turnover of accounts receivable and inventory. In 2021, the net cash flow from operating activities of the company was 4.115 billion yuan, with a year-on-year increase of 4.12%, of which the net cash flow from Q4 operating activities was 10.398 billion yuan. 1) Cash to cash ratio: the company’s cash to cash ratio was 111.35%, a year-on-year change of -3.99pct. At the end of the period, the balance of accounts and notes receivable of the company was 10.421 billion yuan, a year-on-year increase of 36.20%, lower than the growth rate of revenue. 2) Cash ratio: the company’s cash ratio is 115.15%, a year-on-year change of -8.23pct. At the end of the period, the balance of accounts payable and notes payable of the company was 5.943 billion yuan, a year-on-year increase of 63.12%. At the end of 2021, the company’s inventory balance was 1.421 billion yuan, a year-on-year increase of 18.46%; Contract assets reached 2.702 billion yuan, a year-on-year increase of 41.99%
Profit forecast and investment rating: as a leader in the waterproof industry, the company pursues a more sustainable development model while consolidating its main business, actively covers the blank market through organizational structure adjustment, expands non real estate projects and optimizes business quality. At the same time, the company actively cultivates new business segments, such as coatings, mortar, thermal insulation materials and other products, which are expected to develop rapidly through internal resource integration and coordination. The market share of the company’s main waterproof industry continues to increase, and the non real estate sector and non waterproof business are expected to further open up growth space in the future. We estimate that the company’s net profit attributable to the parent company from 2022 to 2024 will be RMB 5.316/67.76/8.653 billion respectively, corresponding EPS will be RMB 2.11/2.69/3.43 respectively, and corresponding PE will be 22x/17x/13x respectively. Considering the company’s future growth and performance cashing ability, we will give a “buy” rating for the first time.
Risk tip: the risk of fluctuation in the downstream real estate industry; Risk of sharp fluctuations in raw material prices; The risk of intensified industry competition; Accounts receivable risk.
