\u3000\u3 China Vanke Co.Ltd(000002) 271 Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) )
The performance is bright and the growth is expected to continue. The company recently released its annual report for 21 years. The annual operating revenue / net profit attributable to the parent company was 31.93/4.2 billion yuan, yoy + 47.0% / 24.1%. In the fourth quarter alone, the company achieved an operating revenue of 9.25 billion yuan (+ 37.0%) and a net profit attributable to the parent company of 1.53 billion yuan (+ 21.3%). During the downturn of 21h2 real estate boom, the company still achieved brilliant performance. The growth rate of revenue was faster than that of net profit, and the gross / net profit margin decreased by 6.51/2.4pct year-on-year. On the one hand, the main raw materials, including asphalt / lotion / titanium dioxide, have risen in different prices in 21 years, while the price adjustment of terminal products is lagging behind, especially in the price of Engineering channels. On the other hand, the proportion of non waterproof business income increased, while the corresponding gross profit margin was relatively low, driving down the overall profitability. Looking forward to the next 22 years, thanks to the channel sinking of the integrated company and the expansion of non real estate business, we expect the revenue to maintain rapid growth.
Both retail channels and non waterproof businesses have achieved high growth. Civil construction group is mainly responsible for the retail channel of waterproof / tile adhesive / Beauty joint agent, with a revenue of 3.79 billion yuan, yoy + 93%. As the end customers of retail are actually foremen / decoration companies, the civil construction group has improved the member operation system with “honggehui” as the core, and established cooperative relations with more than 500 large decoration companies and more than 20000 home decoration companies. The channel sinking strategy was implemented. By the end of the 21st century, there were nearly 4000 dealers, more than 100000 distribution outlets and more than 20000 distribution outlets. In the field of Engineering channels, we will continue to implement and improve the partner mechanism to achieve a win-win situation for partners and the company. In addition, the coating of non waterproof business has increased by 50%, and the ceramic tile adhesive / Beauty joint agent has doubled.
Focus on business quality and expand against the trend. The operating cash flow was 4.11 billion yuan, an increase of 160 million yuan year-on-year. Under the background of the tight capital chain of private real estate developers, the profit quality is prominent. In addition, the provision for bad debts was only 79.52 million yuan due to the difficulty of real estate developers in repaying. We believe that this is due to the company’s more cautious key customer strategy and more inclined to choose real estate developers with strong capital strength / relatively stable operation. In addition, we believe that as the leading position of the waterproof business is stable enough, the bargaining power of the company in terms of payment collection is gradually improved, and the fund for market is no longer the main order taking mode of the waterproof business. In addition, the company’s fund-raising cash flow reached 10.8 billion yuan, including 8 billion yuan raised by private placement. Sufficient capital preparation has laid a solid foundation for the company’s expansion. In 21 years, the total profit of waterproof enterprises in industries above designated size was 7.564 billion yuan, yoy-2.04%. The company chooses to expand against the trend in the downturn of the industry. On the one hand, it is expected to further improve the waterproof market share, because the company will continue to build new production capacity with the raised investment; On the other hand, the expansion of various categories, including the continuous expansion of coatings / mortar powder / non-woven fabrics, also needs the continuous investment of funds.
Forecast of eps2 in 22-24 years 1 / 2.73/3.28 yuan (2.26/2.83 yuan before 22 / 23 years). Referring to the valuation of comparable companies, the company is approved to give 24xpe for 22 years, corresponding to the target price of 50.4 yuan, maintaining the “buy” rating.
Risk tip: the price rise of raw materials exceeded expectations, and the expansion speed of multiple categories did not meet expectations.
