\u3000\u30 Shenzhen Guohua Network Security Technology Co.Ltd(000004) 25 Xcmg Construction Machinery Co.Ltd(000425) )
Event: the company released its 2021 annual report: the total operating revenue in 2021 was 84.328 billion yuan, a year-on-year increase of + 14.01%; The net profit attributable to the parent company was 5.615 billion yuan, with a year-on-year increase of + 50.57%, which was at the upper middle level of the performance forecast; Deduct the net profit not attributable to the parent company of RMB 5.119 billion, a year-on-year increase of + 45.27%.
Key investment points
The performance growth rate ranks in the forefront of the industry, and the leading competitiveness continues to improve
In Q4 alone, the company achieved a total revenue of 14.532 billion yuan, a year-on-year increase of - 35.93%; The net profit attributable to the parent company was 1.005 billion yuan, a year-on-year increase of - 22.35%. In 2021, the company's revenue from hoisting machinery / piling machinery / shoveling machinery / fire-fighting machinery was 27209 / 8952 / 8122 / 4998 million yuan respectively, with a year-on-year growth rate of + 2.72% / + 22.11% / + 22.77% / + 33.86% respectively. According to the company's annual report, XCMG excavator grew into the second in China and the sixth in the world in 2021; Tower crane jumped to the second place in the world; Open pit mining and transportation equipment ranks among the top five in the world, breaking the monopoly of international top giants; Concrete machinery ranks first in the world. In 2021, the company's export revenue was 12.94 billion yuan, a year-on-year increase of + 111.81%, a record high.
The leader of construction machinery with the most flexible performance, and the logic of profit margin improvement continues to be realized
In 2021, the company's comprehensive gross profit margin was 16.24%, with a year-on-year increase of -0.83pct; The net profit margin attributable to the parent company was 6.66%, with a year-on-year increase of + 1.62pct, and the logic of profit margin improvement continued to be realized. Looking forward to the future, the profit margin of the company still has great room for improvement. In the first three quarters of 2021, Xcmg Construction Machinery Co.Ltd(000425) / Sany Heavy Industry Co.Ltd(600031) (not published in 2021 annual report) / Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) the gross profit margin was 15.8% / 27.3% / 24.4% respectively, and the net profit margin was 6.7% / 14.7% / 10.7% respectively. There is still room for the company to double its net profit margin. After the mixed reform in September 2020, the assessment mechanism of the company changed from market share to profit, the profit growth rate and profit margin of the company were significantly higher than those of the industry, the logic of profitability improvement continued to be fulfilled, and the performance flexibility was released.
The overall listing has been steadily promoted, and the "new XCMG" is worth looking forward to
On April 6, 2021, the company announced that it plans to carry out absorption and merger by issuing shares to the shareholder XCMG Co., Ltd., which is mainly engaged in the group's construction machinery business. After the merger, the relevant assets are expected to be listed as a whole. According to the bond offering letter of XCMG Co., Ltd., the revenue of the main unlisted subsidiaries in 2020 is as follows: XCMG excavator (excavator, the top two sales shares in China), XCMG construction machinery (tower crane, China, the top two sales shares) is RMB 23.1 billion, XCMG Shi Weiying (concrete machinery, the top three sales shares in China) is RMB 6.1 billion, and XCMG mining machinery (mining machinery, the top five global sales shares) is RMB 2.8 billion, with a total revenue of RMB 38.2 billion; In 2020, XCMG's main business income was 96.1 billion, of which Xcmg Construction Machinery Co.Ltd(000425) income was 74 billion. After the overall listing, the income scale of "new XCMG" is expected to exceed 100 billion, ranking first in the industry.
The steady growth policy has been increased, and attention has been paid to the valuation and repair opportunities of the construction machinery sector
From January to February 2022, the country issued 877.5 billion yuan of new local government special bonds, with the issuance pace ahead, effectively stimulating the investment in infrastructure projects. In 2022 and Q1, the national infrastructure investment increased by 10.5% year-on-year. The steady growth policy in the second quarter is expected to continue to increase. On March 29 and April 6, the national Standing Committee proposed to "stick to the goal and put steady growth in a more prominent position" and "deploy and timely use monetary policy tools". Since the beginning of 2022, more than 60 cities have issued stable real estate policies. Under the guidelines of urban implementation, Hangzhou, Guangzhou, Zhengzhou, Kunming and other places have relaxed real estate policies by reducing house purchase qualification requirements, reducing down payment ratio, relaxing loan requirements, reducing housing loan interest rate and so on. The construction machinery sector has a lot of early correction, and the two downstream margins of infrastructure and real estate have been improved. The valuation has a large space for repair
Profit forecast and investment rating: we estimate that the net profit attributable to the parent company from 2022 to 2024 will be 7 (original value 79) / 8 (original value 89) / 8.6 billion yuan, and the current market value corresponding to PE is 6.09/5.28/4.91 times respectively, maintaining the "buy" rating.
Risk tip: industry cycle fluctuation; Industry cycle intensifies; The risk of continuous rise in raw material prices, and the overall listing progress is less than expected.
