\u3000\u3 Shengda Resources Co.Ltd(000603) 916 Sobute New Materials Co.Ltd(603916) )
The company released its annual report for 2021 on April 15, with annual revenue of 4.52 billion yuan, an increase of 23.8% at the same time; The net profit attributable to the parent company was 530 million yuan, an increase of 20.9% at the same time; Eps1 27 yuan. In the fourth quarter alone, the company’s revenue was 1.29 billion yuan, an increase of 7.3% and the net profit attributable to the parent company was 170 million yuan, an increase of 19.8%.
Key points supporting rating
In the 21st year, the company’s revenue and profit increased both: the annual revenue of the company was 4.52 billion yuan, an increase of 23.8% at the same time; The net profit attributable to the parent company was 530 million yuan, an increase of 20.9% at the same time. In the whole year, the net cash flow from operating activities of the company was 340 million yuan, rising steadily and slightly.
In the fourth quarter, the gross profit margin and net profit margin increased month on month, and the expense rate increased: in the fourth quarter alone, the company’s gross profit margin was 38.7%, increased by 13.5pct, increased by 3.5pct month on month, and the net profit margin was 14.5%, increased by 1.3pct, increased by 0.7pct month on month. Although the procurement cost increased in the fourth quarter, the company’s gross profit margin and net profit margin increased month on month. The four expense rates in the fourth quarter alone were 20.5%, an increase of 12.3pct at the same time, with a month on month increase of 3.5pct, mainly due to the same increase of 12.4pct in the sales expense rate in the fourth quarter.
Volume increase and price decrease, profit pressure: in 21 years, the company’s water reducing agent and functional materials increased and price decreased, the superimposed cost increased, and the profit was under pressure. The sales volume of high-performance water reducing agent increased by 31.4% and the gross profit per ton decreased by 15.9%. The sales volume of superplasticizer is reduced by 16.4% and the gross profit per ton is reduced by 5.9%. The sales volume of functional materials increased by 37.3% and the gross profit per ton decreased by 20.7%.
Capacity construction supports market development, and the national layout is expected to further improve the market share: in April 2021, the company’s Sichuan Daying base was completed and put into operation, realizing the business coverage of Sichuan Chongqing urban circle. The company has built a new South China production base in Jiangmen, Guangdong, which is expected to be completed in 2022. In 2021, the company’s market development in South China and Southeast China was smooth, and its revenue increased by 77.4% and 38.8% respectively. With the improvement and formation of the company’s national base layout, it laid a good foundation for the company to take advantage of its leading advantages to improve its market share and further consolidate its market position and advantages.
Valuation
The company’s performance is in line with expectations. Considering the rise of raw materials, we partially lowered our profit forecast. It is estimated that the company’s revenue will be 5.14 billion yuan, 6.4 billion yuan and 7.77 billion yuan from 2022 to 2024 respectively; The net profit attributable to the parent company was 630 million yuan, 790 million yuan and 970 million yuan respectively; EPS was 1.51, 1.89 and 2.31 yuan, maintaining the company’s buy rating. Main risks of rating
The production capacity was put in less than expected, the price of raw materials rose, and the demand was less than expected.
