Luyang Energy-Saving Materials Co.Ltd(002088)
Core conclusion
Event: in 21 years, the company achieved a revenue of 3.164 billion yuan, a year-on-year increase of 36.04%, and a net profit attributable to the parent company of 534 million yuan, a year-on-year increase of 44.27%. Among them, Q4 achieved a revenue of 878 million yuan, a year-on-year increase of 7.51%, and the net profit attributable to the parent company was 130 million yuan, a year-on-year decrease of 12.36%, which was in line with expectations. Comments: the double carbon target point promotes demand, the annual performance increases, the price of Q4 raw materials and energy rises, and the performance is under pressure. In Q4, disturbed by multiple factors such as power cut-off and power restriction, rising raw material and energy prices, the company’s revenue still increased, but its performance fell slightly under pressure. Specifically, the net profit attributable to the parent company was 130 million yuan, a year-on-year decrease of 12.36%, of which the year-on-year impact of investment income and credit impairment was about 28.43 million yuan. After deducting this impact, it increased by 10.15% year-on-year.
The scale effect was prominent, and the cost rate decreased steadily. The company’s expense rate during the 21 year period was 15.17%, with a year-on-year decrease of 1.64pct. Among them, the sales expense rate / management expense rate / R & D expense rate and financial expense rate were 6.33% / 4.47% / 4.23% / 0.14%, with a year-on-year change of -0.92% / -0.63 / -0.20/0.14pct, mainly due to the prominent scale effect of the company and the steady decline of expense rate under the sharp increase of sales volume.
Operational capacity continued to improve and roe hit a record high. While the turnover rate remained stable, the substantial increase in the company’s net interest rate led to a significant increase in roe. In 21 years, the company’s weighted roe reached 21.73%, the best level in history.
Under the cycle of capacity expansion, we are optimistic about the application of products in new fields and the domestic substitution of building fire-proof materials. Recently, Luyang has signed strategic cooperation with laminit, an enterprise in the field of passive fire prevention in buildings. The company is expected to further open the market in the field of building fire prevention and enhance the competitiveness of the company with the help of laminit’s silicate fiber flexible fire coil products for smoke control and exhaust air duct.
Investment suggestion: high dividend highlights the value. According to the dividend corresponding to the annual report of 21 years, the dividend rate of the company is up to 5.14%, with a high safety margin. We predict that the company’s net profit attributable to the parent company in 22-24 years will be RMB 680 / 8.2 / 980 million, corresponding to pe1.0 billion 2 / 8.4 / 7.0x, maintaining the “buy” rating.
Risk warning: epidemic risk, risk of rising energy prices, and risk that downstream demand growth is less than expected
