Ad shares ( Yonggao Co.Ltd(002641) )
On April 11, the company released its annual report for 2021, achieving an annual operating revenue of 8.88 billion yuan, an increase of 26.2%; The net profit attributable to the parent company was 580 million yuan, a decrease of 25.0% at the same time; Net cash from operating activities was 340 million yuan, down 68.3% from the same period; Earnings per share is 0.47 yuan / share. In the fourth quarter, the company’s revenue was 2.51 billion yuan, an increase of 10.0% at the same time; The net profit attributable to the parent company was 220 million yuan, down 6.4% at the same time; The net operating cash was 330 million yuan.
Key points supporting rating
The sales volume of products increased by 12.6% and the average price increased by 12.1%. The company achieved 728800 tons of plastic pipe sales throughout the year, with a year-on-year increase of 12.6%; We calculate that the average price of plastic pipe products is 12185 yuan / ton, an increase of 12.1% over the same period; The volume and price of the company’s products increased all year round. The cost of plastic pipe products was 9894.8 yuan / ton, an increase of 22.3%. The company’s main sales area, East China, achieved a sales revenue of 5.39 billion yuan, an increase of 27.8% at the same time, accounting for 60.7%; The main product PVC achieved a revenue of 4.45 billion yuan, an increase of 31.4%, accounting for 50.1%.
Rising prices of raw materials and bad debts dragged down profits, and the growth of revenue reflected the leading pressure resistance: throughout the year, the company increased revenue without increasing profit. The company’s production capacity construction is smooth. At present, it has a production capacity of more than 1 million tons of plastic pipelines; The market development in key areas of the company also maintained a good momentum. In 2021, the cost of raw materials continued to be high, which reduced the profit margin of the company. Evergrande’s cash flow thunderstorm caused the company’s single withdrawal of bad debts. The book balance of accounts receivable of Evergrande group totaled 480 million yuan. In 2021, 20% of bad debt reserves were withdrawn individually, affecting the company’s profit of 96.473 million yuan. At present, the price of raw materials has dropped, and the scale of bad debts of Evergrande is controllable. It is optimistic that the company will go into battle with light equipment in 2022.
Stable position and optimistic about medium and long-term development: at present, the company has a production capacity of more than 1 million tons of plastic pipes, ranking second in the industry, with a market share of about 4.4%, and the industry position is stable. In recent years, the company’s governance has gradually improved, the four expense rates have gradually decreased, and the internal value of the company is expected to continue to be deeply excavated.
Valuation
Considering that the company’s market development is smooth and the cost pressure is expected to slow down, we expect the company’s revenue to be 10.54 billion yuan, 12.11 billion yuan and 13.87 billion yuan respectively from 2022 to 2024; The net profit attributable to the parent company was RMB 770million, RMB 990million and RMB 1.19 billion respectively; EPS is 0.63, 0.80 and 0.97 yuan, maintaining the company’s buy rating.
Main risks of rating
Rising raw material prices, intensified market competition, overcapacity and bad debt risk of single customer
