\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 710 Sumec Corporation Limited(600710) )
Executive summary
Event: the company recently released its 2021 annual report. In 2021, the company’s operating revenue was 168682 billion yuan, a year-on-year increase of 71.09%; The net profit attributable to the parent company was 767 million yuan, a year-on-year increase of 40.43%; The net profit attributable to the parent company after deduction was 628 million yuan, a year-on-year increase of 40.89%. The company’s performance hit a new high over the years, in line with our expectations. In the fourth quarter, the company’s revenue was 44.525 billion yuan, a year-on-year increase of 58.23%; The net profit attributable to the parent company was 113 million yuan, a year-on-year increase of 408.57%; The net profit attributable to the parent company after deducting non profits was – 30 million yuan, with a year-on-year loss of 13 million yuan. In terms of gross profit margin, the company’s gross profit margin was 3.95% in 2021, down 1.59 percentage points from 2020, mainly due to the increase in the proportion of supply chain business revenue with low gross profit margin.
The profit contribution of industrial chain business exceeded that of supply chain business for the first time: in 2021, the revenue of industrial chain sector was 27.147 billion yuan, a year-on-year increase of 11.48%; The total profit was 1.685 billion yuan, a year-on-year increase of 34.69%, accounting for 53.34% of the company’s total profit, surpassing the supply chain business for the first time. In terms of gross profit margin, when the price of raw materials rises sharply, the gross profit margin of industrial chain business is 16.96%, only 0.12 percentage points lower than that in 2020. The performance of each sub sector of the industrial chain sector is as follows: ① the revenue of the large consumption sector is 14.5 billion yuan, with a year-on-year increase of 8.98%, and the gross profit margin is 18.42%, with a year-on-year decrease of 1.95 percentage points; ② The revenue of the large environmental protection sector was 7.13 billion yuan, a year-on-year increase of 17.78%, and the gross profit margin was 14.04%, a year-on-year decrease of 0.90 percentage points; ③ The revenue of shipbuilding and shipping sector was 3.41 billion yuan, with a year-on-year increase of 10.38%, and the gross profit margin was 17.65%, with a year-on-year increase of 7.78 percentage points; ④ Other business income in the industrial chain segment was 2.11 billion yuan, with a year-on-year increase of 10.69%, gross profit margin of 15.76%, and a year-on-year increase of 3.14%.
Supply chain business: in 2021, the revenue of the company’s supply chain operation segment was 140657 billion yuan, a year-on-year increase of 90.59%; The total profit was 1.474 billion yuan, a year-on-year increase of 50.87%, accounting for 46.66% of the total profit of the company; The gross profit margin was 1.39%, a year-on-year decrease of 0.32 percentage points. In 2021, faced with the risks and challenges of huge fluctuations in commodity prices, appreciation of RMB exchange rate, surge in shipping costs and cancellation of export tax rebates for some products, the company successfully controlled the fluctuation of gross profit margin under the condition of substantial growth in revenue. The performance of each sub segment of the supply chain is as follows: ① the revenue of bulk commodity business is 125.17 billion yuan, an increase of 105.72% year-on-year; The gross profit margin was 1.15%, a year-on-year decrease of 0.17 percentage points; ② The revenue from electromechanical equipment business was 15.48 billion yuan, a year-on-year increase of 19.51%; The gross profit margin was 3.32%, a year-on-year decrease of 0.21 percentage points.
The scale effect is obvious, and the period expense rate decreases significantly: the period expense rate of the company in 2021 is 1.81%, which is 1.33 percentage points lower than the period expense rate of 3.14% in 2020, ensuring that the net profit margin of the company will only decrease by 0.28 percentage points in 2021 when the gross profit margin decreases by 1.59 percentage points. Specifically, the company’s sales expense rate, management expense rate, R & D expense rate and financial expense rate in 2021 were 0.83%, 0.54%, 0.28% and 0.16% respectively, down 0.67%, 0.29%, 0.09 and 0.28 percentage points respectively compared with 2020.
Profit forecast and valuation of the company: it is estimated that the operating revenue of the company from 2022 to 2023 will be 193984 billion yuan and 232781 billion yuan respectively, with a year-on-year increase of 15.00% and 20.00% respectively; The net profit attributable to the parent company was 863 million yuan and 968 million yuan respectively, with a year-on-year increase of 12.56% and 12.13% respectively; EPS is 0.66 and 0.74 yuan respectively. At present, the PE valuation of the stock price corresponding to the expected net profit attributable to the parent company from 2022 to 2023 is 9.24/8.24 times respectively, maintaining the “overweight” rating.
Risk warning: covid-19 epidemic risk; International operation risk; Geopolitical risks; Commodity market risk; exchange-rate risks
