\u3000\u3 China Vanke Co.Ltd(000002) 271 Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) )
In 2021, Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) achieved an operating revenue of 31.934 billion yuan, with a year-on-year increase of 46.96%; The net profit attributable to the owners of the parent company was 4.205 billion yuan, a year-on-year increase of 24.07%, and the EPS was 174 yuan.
Comments:
The volume increased, the revenue increased, and the market share increased rapidly. The company’s total sales volume of waterproof materials in 2021 was 153 million square meters, with a year-on-year increase of 51.20%, the highest growth in the past 10 years, second only to 2017. Driven by the growth of sales volume, the company’s operating revenue of waterproof materials maintained a growth rate of 47.78%, which was 31.72 percentage points higher than the growth rate of 16.06% of the total operating revenue of Enterprises above the scale of waterproof materials. This makes the company’s operating income of waterproof materials account for 20.20% of Enterprises above Designated Size, an increase of 4.34 percentage points compared with 2020, and the market share level has been rapidly improved in 2021. As the absolute leader of the industry, the company is far ahead of the second place (less than 10 billion). The comprehensive competitiveness such as product reputation, national layout of the base, product cost advantage and abundant funds make the company have strong advantages in bidding. In the industry development environment in 2021, it can quickly improve its market share, showing that the company’s core advantages are still obvious.
The price rise of raw materials squeezed the profit space, and the bargaining power improved the gross profit margin in the fourth quarter. In 2021, the price of raw materials soared. The cost of raw materials per square meter of the company reached 15.22 yuan, an increase of 6.34 yuan year-on-year, and the comprehensive gross profit margin decreased by 6.51 percentage points year-on-year. In particular, the gross profit margin in the third quarter had the greatest impact, with a year-on-year decrease of 11.18 percentage points and a month on month decrease of 1.9 percentage points. However, in the fourth quarter, when the price of raw materials was still high and stable, the gross profit margin increased to 30.31%, up 1.36 percentage points month on month. The company raised the price in the fourth quarter and improved the level of gross profit margin. In the case of large-scale downstream customers and advantages, the bargaining power of the company is reflected.
Driven by the integration of engineering and civil construction to ensure long-term and steady development. The company has rapidly improved its scale advantage through engineering business and established a stable and far leading leading position. In recent years, the company has actively developed civil construction related businesses and achieved rapid development. In 2021, the operating revenue of civil construction increased by 93% and the revenue accounted for about 15%. In the field of civil construction, the “Hongge club” is used to directly connect with the foreman and cooperate with large decoration companies and home decoration companies. By the end of 2021, the “Hongge club” has more than one million members, more than 500 large decoration companies and more than 20000 home decoration companies, nearly 4000 distributors and more than 100000 distribution networks. Through the integrated operation of engineering and retail business, the company has realized the deeper and broader driving of business, and gradually formed the two wheel driving development mode of civil construction and engineering, superimposing the strong market competitiveness of the company, so as to lay the foundation for the long-term and steady development of the company.
Profit forecast and investment rating: we expect the company’s net profit attributable to the parent company from 2022 to 2024 to be 5.322 billion yuan, 6.869 billion yuan and 8.991 billion yuan respectively, corresponding to EPS of 2.11, 2.73 and 3.57 yuan respectively. The PE value corresponding to the current stock price is 22, 17 and 13 times respectively. Considering the continuous increase of the company’s deep excavation moat market share and the long-term and stable growth brought by the rapid development of civil construction business and integrated operation, the investment rating of the company “strongly recommended” is maintained.
Risk tip: the marginal improvement of real estate policy is less than expected, and the development speed of the new model is less than expected.
