\u3000\u3 China Vanke Co.Ltd(000002) 415 Hangzhou Hikvision Digital Technology Co.Ltd(002415) )
Conclusions and suggestions:
Performance in 2021: in 2021, the company achieved a revenue of 81.42 billion yuan, yoy + 28.2%, and recorded a net profit attributable to the parent company of 16.8 billion yuan, yoy + 25.5% (YoY + 28.4% after deduction). The performance was in line with expectations. On a quarterly basis, Q1, Q2, Q3 and Q4 achieved revenues of 14 billion yuan, 19.91 billion yuan, 21.73 billion yuan and 25.79 billion yuan respectively in 2021, with yoy + 44.9%, + 34.2%, + 22.4% and 20.0% respectively, and recorded net profits of 2.17 billion yuan, 4.31 billion yuan, 4.48 billion yuan and 5.83 billion yuan respectively, with yoy + 44.9%, + 37.9%, + 17.5% and + 18.0% respectively. The performance in the second half of the year was also affected by the policy changes in China’s real estate and education industry. The company’s dividend plan is 9 yuan (including tax) for every 10 shares, with a dividend rate of 2.3%.
22q1 performance: the company also released 22q1 performance. 22q1 achieved a revenue of 16.52 billion yuan, yoy + 18.1%, and recorded a net profit of 2.28 billion yuan, yoy + 5.3% (YoY + 9.3% after deduction), which was basically in line with expectations. The epidemic control affected the company’s business growth in China.
In the Chinese business, SMBG has achieved good growth, steady overseas business and continued high growth in innovative business: (1) in terms of Chinese business, PBG (China Public Service Group) has achieved revenue of 19.161 billion yuan, yoy + 19.9%, EBG (enterprises and institutions group) has achieved revenue of 16.63 billion yuan, yoy + 12.9%, SMBG (small and medium-sized enterprises and institutions group) has achieved revenue of 13.49 billion yuan, yoy + 46.5%, and other main products and services have achieved revenue of 943 million yuan, yoy-2.9%. (2) Overseas main business products and services achieved revenue of 18.93 billion yuan, yoy + 15.1%, mainly because the company made full use of global marketing advantages to promote the sales of high-value products. (3) The revenue from innovative business reached 12.27 billion yuan, yoy + 98.9%, of which the revenue from fluorite, Siasun Robot&Automation Co.Ltd(300024) , micro film, automotive electronics and storage business exceeded 1 billion yuan. At present, the revenue from innovative business accounts for 15.1%, which has grown into a stable driving force to drive the company’s performance.
The adjustment of accounting policies and the rise in the price of raw materials affect the level of gross profit margin: in 2021, the comprehensive gross profit margin was 44.3%, a year-on-year decrease of 2.2 percentage points, of which the comprehensive gross profit margin of 21q4 was 40%, a year-on-year decrease of 4.2 percentage points, which was mainly due to the adjustment of some engineering income with low gross profit and freight as cost items. The cost rate during the period was 23.1%, a year-on-year decrease of 2 percentage points, mainly due to the decrease of sales expense rate. 22q1’s comprehensive gross profit margin was 43.7%, with a year-on-year decrease of 3.1 percentage points, of which the impact of freight adjustment to cost item was about 0.7 percentage points. The other changes were mainly caused by the rise of raw material prices. The cost rate during the period was 27.0%, with a year-on-year decrease of 2 percentage points, which was mainly due to the decrease of sales rate.
Profit expectation: considering the rising price of raw materials and the impact of the current epidemic, we slightly lowered the company’s profit forecast, but it is expected that the future performance will recover with the credit easing and financial strength. We expect the company to achieve net profits of 19.27 billion yuan and 23.47 billion yuan in 2022 and 2023 respectively, yoy + 14.7% and + 21.8% respectively, EPS of 2.1 yuan and 2.5 yuan respectively, and the corresponding dynamic PE of the current stock price is 19x and 16x respectively. The valuation is reasonable. We maintain the “buy” investment proposal.
