\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 15 Jiangsu Canlon Building Materials Co.Ltd(300715) )
The company released its 2021 annual report and the first quarterly report of 2022 on April 20. In 2021, the company achieved a revenue of 2.59 billion yuan, an increase of 28.8% at the same time, which basically met the expectation. The net profit attributable to the parent company was 72 million yuan, a decrease of 74.2% at the same time; In 2021, the company made a total of 256 million yuan of impairment provision, including 151 million yuan of bad debt provision. In the first quarter of 2022, the company achieved a revenue of 326 million yuan and a net profit attributable to the parent company of 8.586 million yuan, down 26.9% and 84.1% respectively.
Key points supporting rating
Provision for impairment and cost pressure weaken profits. In 2021, the impairment of notes / accounts receivable of Evergrande group, Blu ray group and Rongsheng real estate was 35.422 million yuan / 149554 million yuan, which greatly weakened the company’s profits. In 2021, the price of raw materials such as asphalt and lotion weakened the company’s profits.
The sales volume increased steadily, the gross profit margin decreased more, and the expenses decreased significantly. In 2021, the company achieved product sales of 131 million square meters, a year-on-year increase of 33.3%, and the growth rate is still stable. We estimate that the unit price of the company’s products is 19.8 yuan, with a decrease of 0.7 yuan; The average cost per unit is 13.8 yuan, with an increase of 2.2 yuan; The single average gross profit was 6.0 yuan, down 2.8 yuan at the same time; The cost per square meter is 3.6 yuan, with a decrease of 1.3 yuan. The company’s annual gross profit margin was 30.3%, down 12.9pct. The rising cost is the main reason for the decline of the company’s gross profit margin. As the company’s polymer materials are in the market development period, it is difficult to raise the price, which is greatly affected by the cost. In addition, attention should be paid to the future debt repayment pressure brought by the company’s recent sustained growth of external financing.
Start again with light gear: the actual controllers and senior executives of the company promise to bear the debts that Evergrande and its member enterprises still cannot recover in 2022, and the impairment has been fully accrued. The impact in 2022 is controllable. The R & D expense rate of the company has increased year by year, which is higher than the industry average. The development of core patents is relatively smooth, and the advantages in the field of polymer waterproof materials are expected to be consolidated. The polymer industrial park has entered the normal production stage, and the product quality and efficiency can be improved. The expansion of CSPV system is accelerated, which is expected to improve the company’s comprehensive competitiveness.
Valuation
Considering the company’s cost pressure, we adjusted the company’s profit forecast and estimated that the company’s revenue from 2022 to 2024 would be 3.41 billion yuan, 4.43 billion yuan and 5.75 billion yuan; The net profit attributable to the parent is 310 million yuan, 390 million yuan and 510 million yuan respectively; EPS is 0.82, 1.01 and 1.32 yuan respectively. Maintain the company’s buy rating.
Main risks of rating
Raw material cost risk, polymer market development less than expected, credit impairment, cash flow pressure.
