\u3000\u30003 Zhejiang Great Southeast Co.Ltd(002263) 00226)
Event:
The company announced its 2021 annual report: in 2021, the company achieved a revenue of 65.775 billion yuan, a year-on-year increase of 12.39%; The net profit attributable to the parent company was 178million yuan, a year-on-year decrease of 17.86%; The net profit deducted from non parent company was 149 million yuan, a year-on-year decrease of 21.87%.
1. After adding back the share based payment fee, the net profit increased by 6.38%, and the operating cash flow improved significantly
The decrease in the company’s net profit in 2021 was mainly due to the provision of share based payment expenses of about 52.52 million yuan by the parent company. After adding back, the company’s net profit attributable to the parent company increased by 6.38% year-on-year. In 2021, the net operating cash flow of the company was 726 million yuan, compared with -1.194 billion yuan in the same period last year. The significant improvement of operating cash flow is mainly due to the more mature operation mode of the subsidiary steel bank e-commerce platform, the improvement of service capacity, the increase of sales collection capacity, and the increase in the proportion of non recourse factoring business in accounts receivable factoring business. We expect that the improvement of cash flow of the company will continue in the future.
2. The data service business category expanded smoothly, and the income of the energy and chemical industry increased by 82.95%
The company’s industrial data service business not only consolidated the leading edge of the ferrous metal sector, but also increased investment in nonferrous metals, energy and chemical industry, building materials, Shenzhen Agricultural Products Group Co.Ltd(000061) , and other sectors. In 2021, the data business revenue was 609 million yuan, with a year-on-year increase of 27.67%, of which the data subscription revenue was 333 million yuan, with a year-on-year increase of 26.99%. The number of active members and paid members of the company’s websites and terminals increased. In 2021, Longzhong information, a subsidiary of the company in the energy and chemical industry, realized an operating revenue of 99.68 million yuan, with a year-on-year increase of 82.95%. The category expansion logic is gradually being realized. At the end of 2021, the company had 4211 employees, an increase of 1173 compared with the end of 2020, including 1017 in the data service sector, reflecting the company’s determination to expand categories. We are optimistic about the company’s layout and development in multiple industrial chains and categories of bulk commodities.
3. The settlement volume of trading business increased steadily, and the service fee per ton of steel for consignment trading increased significantly
In 2021, the company’s steel trading business achieved a revenue of 65.089 billion yuan, a year-on-year increase of 12.28%, and the settlement volume of platform steel reached 461424 million tons, a year-on-year increase of 5.87%. According to the calculation of gross profit, the company’s service fee for consignment trading per ton of steel in 2021 was about 7.36 yuan / ton, a year-on-year increase of 52.51%. Gangyin e-commerce adheres to the two wheel drive of “platform + service”. In 2021, there were more than 1300 paying users of “gangyin cloud SaaS” products. We believe that the company’s steel trading business has gradually matured. In the future, based on the stable increase of settlement volume, the service fee per ton of steel is expected to continue to increase and the cash flow is expected to continue to improve.
Profit forecast and investment suggestions: we believe that the expansion logic of the company’s commodity data service business category is gradually being realized, and the operation quality of trading business continues to improve. Adjust the profit forecast according to the company’s annual report, and adjust the company’s net profit from 347 / 455 million yuan to 207 / 249 million yuan from 2022 to 2023. The net profit in 2024 is expected to be 325 million yuan, corresponding to 31.13/25.87/19.82 times the current market value of the company, maintaining the “buy” rating.
Risk warning: the expansion of data service business category is less than expected; Bad debt accrual risk of steel bank e-commerce; Systemic risk.
