\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 984 Shaanxi Construction Machinery Co.Ltd(600984) )
Event: the company disclosed the annual report of 2021. The annual revenue was 4.725 billion, yoy + 18.08%, and the net profit attributable to the parent company was 375 million, yoy-32.29%; Q4 achieved a revenue of 1.229 billion, yoy-5.81%, and a net profit attributable to the parent company of - 58 million, yoy-132.78%.
China's real estate recession dragged down the company's overall performance. The growth rate of the company's revenue and profit attributable to the parent decreased quarter by quarter, with a year-on-year decline in the closing of Q4 and a significant year-on-year decline in the net profit attributable to the parent: 1) affected by the recession of the real estate industry, from the perspective of China's housing construction area, it increased by 5.2% year-on-year in 2021 and showed a double-digit decline every month from 2021m7 to 2021m12; China's new housing construction area fell by 11.4% in the whole year, and 2021m2 began to enter negative growth. There was a double-digit year-on-year decline every month from 2021m7 to 2021m12, and the year-on-year negative growth rate even exceeded 30% in some months in the fourth quarter; 2) The national infrastructure investment only increased slightly by 0.4% in 2021, and began to increase negatively in 2021m5, and continued to 2021m122021m7, even with a negative growth rate of 10.5%; 3) The recession of the real estate industry led to some risks in customer collection. The company accrued a credit impairment loss of 325million in the year, an increase of 163.2% year-on-year. From the perspective of the proportion of bad debt provision accrued by aging of accounts receivable, the proportion of provision in 2021 was higher than that in 2020, reflecting a prudent attitude.
Continue to expand production and increase market share. In the construction machinery leasing sector, the company mainly has two businesses: road construction product leasing and construction product leasing. Pangyuan leasing, a subsidiary, is the world's largest lifting machinery lessee. It has many branches and subsidiaries across the country and has set foot in overseas markets such as the Philippines, Malaysia and Cambodia. It is the first brand of construction machinery leasing in China; Relying on the advantages of manufacturing enterprises, the leasing business of road construction products has basically completed the transformation and upgrading integrating equipment leasing, technical support and services and road construction. At the end of 2021, the number of tower cranes of the company reached 9981, with 1720 newly added in that year, with a growth rate of 20.8%. The total ton meters of tower cranes reached 1.987 million ton meters, with a year-on-year increase of 19.3%. The purchase amount of new equipment was 1.87 billion yuan, which is still expanding. The subsidiary pangyuan leasing continued to strengthen operation management, actively ploughed the market, improved asset utilization and operation efficiency, so as to further improve market share.
Crises coexist in 2022. The downstream of the company's business is mainly real estate, supplemented by infrastructure. From the current situation: 1) real estate continues to decline. From January to February, the new construction area of houses in China fell by 12.2% year-on-year, still showing a downward trend. In order to support the recovery of the real estate industry, some local governments have begun to relax the restrictions on house purchase, which may improve the real estate industry in the future; 2) The capital construction force is obvious. From January to February, the national infrastructure construction investment increased by 8.1% year-on-year. At present, the demand for steady growth is strong, and the capital construction force in advance is obvious, which is expected to form a certain support. For the company, the short-term pressure may still be on, but the signs of improvement in the industry are now. The internal strength of the industry in the downward stage is good, and the elasticity in the upward stage is expected to be released.
Investment suggestion: Based on the current business development of the company, the net profit attributable to the parent company from 2022 to 2024 is expected to be RMB 320 / 570 / 770 million respectively, and the corresponding PE is 27x / 15x / 11x respectively. Considering the great development pressure faced by China's real estate industry and the pressure on the company's short-term development, the company is rated as "prudent recommendation".
Risk warning: real estate investment continues to decline, bad debt risk, and infrastructure progress is lower than expected risk
