\u3000\u3 China Vanke Co.Ltd(000002) 271 Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) )
In the past 21 years, the income increased rapidly against the trend, and the industry differentiation accelerated
The company’s Q4 revenue reached 9.252 billion, with a year-on-year increase of 37.01%, and the net profit attributable to the parent company was 1.527 billion, with a year-on-year increase of 21.32% under the high base of 100% + growth in 2020q4. In 2021, the increasing pressure on the demand side also accelerated the industry differentiation, and the company’s income expanded against the trend. As the largest company in the industry, it achieved the highest growth elasticity. At the same time, the growth rate of the company’s waterproof coating, material sales and other businesses is significantly faster than the whole, and many categories are in rapid expansion.
Q4 gross profit margin improved month on month, and the net profit margin remained high under the control of expense rate
In 21 years, with the rapid rise of raw material prices, the annual gross profit margin was 30.53%, down 6.51 PCTs year-on-year. With the gradual implementation of the company’s price increase in September, the gross profit margin of Q4 was 30.31%, up 1.36pcts month on month. At the same time, the company announced in March that considering the rising pressure of raw materials, the price of some coiled materials and coating products will be increased by 10-20%. It is expected that the gross profit margin will continue to improve after Q2 is implemented.
In the whole year, the company’s sales expense ratio / management expense ratio decreased by 1.28pcts/0.65pcts to 6.94% / 5.15% respectively, which is due to the rapid growth of the revenue side and the company’s strong management and expense control ability, which led to the overall period expense ratio of the company decreased by 3.34pcts to 14.57%. Therefore, in the case of a sharp decline in the annual gross profit margin, the net profit margin decreased by 2.39 PCTs to 13.19%, still maintaining a relatively high profit level.
The cash flow situation exceeded expectations and the operation quality gradually improved
The cash to income ratio reached 111.35% in 21 years, decreased by 3.99 PCTs and remained relatively high. The net cash flow from operating activities of the company is 4.115 billion yuan, which matches the net profit by 97.86%, exceeding the market expectation. If the cash payment is relatively high in 2021 due to factors such as stock preparation during the price rise period of raw materials, the cash flow situation will be better. At the same time, the turnover rate of accounts receivable continues to rise. Considering that the growth rate of accounts receivable and notes in the equity incentive plan in 2021 is lower than that of income, it is expected that the operation quality of the company will be further improved.
In the past 22 years, both ends B and C made efforts to drive the income to a higher level
In the past 21 years, the company has fully empowered and authorized the integrated company to integrate resources and intensively cultivate the local market. At present, the business of the integrated company is growing rapidly. At the same time, in 2021, the number of “honggehui” members of C-end civil construction group has exceeded one million, and has established cooperative relations with more than 500 large decoration companies and more than 20000 home decoration companies. There are nearly 4000 dealers, more than 100000 distribution outlets and more than 20000 distribution outlets (including image stores). With the accumulation of brands and channels, the revenue has reached 3.79 billion yuan, a year-on-year increase of 93%. Looking forward to the next 22 years, the company’s b-end will continue to strengthen and expand the integrated company, and rapidly improve the market share. The C-end also adheres to the priority of civil construction, realizes the great acceleration of civil construction, and jointly drives the revenue growth.
Profit forecast and valuation
The company has established all-round leading advantages. With the continuous standardization of the industry, the market share will continue to increase. With the sinking of channels, the development of C-end and the expansion of categories, the company will continue to move forward to a platform enterprise of chemical building materials. It is estimated that the company’s revenue from 2022 to 2024 will be 40.3/49.2/59.6 billion yuan, with growth rates of 26.28% / 22.09% / 21.04% respectively, and the net profit attributable to the parent company will be 5.297/66.50/8.287 billion yuan, with growth rates of 25.99% / 25.53% / 24.62% respectively, and PE will be 22 / 17 / 14 times, giving it a “buy” rating.
Risk tips
The price rise of raw materials exceeded expectations, the demand for real estate and infrastructure fell short of expectations, and the growth of new categories fell short of expectations
