\u3000\u3 China Vanke Co.Ltd(000002) 271 Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) )
Event: Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) released the annual report of 2021. In 2021, the annual 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%; Deduct the net profit not attributable to the parent company of RMB 3.867 billion, a year-on-year increase of + 25.10%. In the fourth quarter alone, the revenue 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%, and the net profit not attributable to the parent company was 1.399 billion yuan, a year-on-year increase of 32.23%.
Channel reform and multi category expansion have achieved remarkable results, with high income growth and cost savings to hedge cost pressure, and the growth force remains the same. During the reporting period, the company strengthened efforts to implement and deepen the provincial and regional integrated operation, and the regional integrated companies deeply integrated the original direct sales and engineering channels, so as to avoid internal friction, expand engineering customers more efficiently and continuously improve the market share of the company. During the reporting period, the growth rate of the company’s main business income was 46.96%, faster than that of Enterprises above Designated Size in the waterproof industry by 13.20%, The proportion of revenue in the total revenue of waterproof Enterprises above designated size increased by 5.32 percentage points to 25.31%. In terms of retail end and multi category business, China Minjian group has deeply cultivated the operation of “honggehui” membership system, increased the expansion of dealers and channel outlets, and actively explored Internet channels and expanded multi category businesses such as ceramic tile glue. With multiple measures taken at the same time, the revenue growth rate in 2021 is 93%, accounting for about 12% of the company’s overall revenue. In the new category, Deauville coatings achieved a revenue of 2.8 billion, a year-on-year increase of 133%. The company’s main cost items are oil head chemical products such as asphalt and acrylic acid. In 2021, driven by the rise in crude oil prices, the price of chemical products rose sharply. Taking asphalt as an example, the average price rose by 21.68% year-on-year in 2021. Under the cost pressure, the company’s gross profit margin fell by 6.51%. Throughout the year, under the channel reform of judging the situation and strong implementation ability, the revenue increased rapidly. At the same time, the expense rate decreased by 3.34 points and the net interest rate decreased by only 2.4 points. The pressure on the cost side was hedged. The annual performance of the company increased by 24.63%, and the growth power of the leading industry remained.
Real estate credit events occur frequently, and the operation quality is full of color. Since the second half of 2021, represented by a leading real estate enterprise, real estate credit events have occurred frequently, while Yuhong has not accrued the impairment of large amount of accounts receivable, which is due to the unremitting efforts made to optimize the operation quality since 2018. The specific measures include forward-looking judgment on the credit risk status of customers, hierarchical control and increasing the assessment of collection. From 2019 to 2021, the company’s revenue to cash ratio remained at about 110%, The cash content of net profit reached 1.17 and 0.98 respectively from 2020 to 2021, and the operation quality has withstood the test of real estate credit risk events.
Core logic: 1) under the trend of improving industry standards and downstream customer concentration, leading companies promote the steady increase of market share by virtue of leading advantages such as brand, channel, scale, capital, customer resources and management ability; 2) Relying on the resources and customer advantages accumulated by the core waterproof business, the company actively carries out business cooperation and fully extends to multiple fields (coating, thermal insulation, etc.) to contribute to the performance increment; 3) Channel sinking under the “integrated operation and management” of the company, effectively integrate key elements such as projects, channels and categories, expand non real estate business, expand affordable housing, urban renewal and other markets, and further consolidate competitive advantages; 4) With the promotion of the whole county, the photovoltaic roof waterproof market is expected to contribute new increment. The company has cooperated with many photovoltaic enterprises such as Jingao, and has sufficient TPO coil capacity support, so it is in a leading position in the competition.
Investment suggestion: considering the data of the company’s annual report in 2021 and the higher than expected rise in raw material costs in 2022q1, we adjusted the company’s net profit attributable to the parent company in 22 and 23 years to 5.24 billion yuan and 6.81 billion yuan respectively (the last forecast was 5.31 billion yuan and 6.8 billion yuan), corresponding to 22 and 17 times of PE, and maintained the “overweight” rating at the current time point.
Risk warning: industry competition intensifies; Downstream real estate demand is lower than expected; The price of raw materials fluctuates greatly; The risk of rapid growth in the scale of accounts receivable.
