\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 86 Beijing New Building Materials Public Limited Company(000786) )
Market concerns and our recommendation logic. The market is worried about the decline in the total demand for gypsum board, the company's market share of about 68% in China is close to the ceiling, the proportion of "two wings" business is still low, and the growth is limited due to fierce industry competition. We believe that the demand for gypsum board renovation and the promotion of prefabricated buildings drive the total resilience, the global layout provides a growth pole, the cost competitiveness and pricing power will continue to deepen, and there is great potential for medium and high-end brands in the Chinese market. The "two wings" business has been steadily promoted, and the four new growth points of gypsum mortar, light steel keel, waterproof and coating are full of highlights.
Gypsum board has significant cost advantages, high market share brings high pricing power, and the medium and high-end brand is expected to improve profitability. Cost advantage: exclusive reserve of desulfurization gypsum resources + high self-sufficiency rate of face paper + low energy consumption + scale advantage. Demand is resilient: guided by the total demand of gypsum board in developed countries and the evolution of competition pattern, we believe that the total demand of gypsum board in China has strong resilience. And the company actively restart and explore overseas markets. High market share brings high pricing power: the company's oligarchy brings strong pricing power. Under the sharp rise in the prices of face paper in 2017 and coal in 2021, the increase of the company's gypsum board price basically completely transmits the increase of cost and has strong ability to follow the price. Medium and high-end brand: compared with developed countries, there is more room for upgrading the national standard of Chinese gypsum board, the demand for thick board and functional gypsum board will continue to increase, and Beixin has rich product reserves. In terms of brand building, Taishan brand has launched a new round of brand promotion since 2021. On the channel side, the company increased strategic cooperation with traditional dealers, big B and small B channels to help promote the sales of medium and high-end products. With the process of high-end brand, the profitability of the company will continue to improve.
Light steel keel and gypsum mortar: the small "two wings" are actively developed and have strong synergy with the main industry. Light steel keel "wing": we estimate that the market scale is about 50 billion, and Beixin city accounts for 5.5%, with great room for improvement. The keel and gypsum board channels have strong synergy, and the supporting sales have achieved remarkable results, with the revenue of CAGR 33% from 2017 to 2021. Gypsum mortar "wing": it is the upgrading direction of plastering materials. The consumption has increased rapidly in recent years, and there is still much room for improvement in the future. Gypsum mortar forms strong synergy with gypsum board at the production end, and the company's desulfurization gypsum resources form a strong support for low-cost expansion.
Waterproof and coating: the "two wings" are advancing steadily, and there is a broad space for growth. Waterproof: 15 of the 30 waterproof bases planned during the 14th Five Year Plan period have been completed, and the revenue, market share and brand strength have increased rapidly. In 2021, the company's waterproof revenue was 3.87 billion yuan, accounting for 18.4% of the total revenue, accounting for about 2% of the market, ranking among the top three in the industry and brand preference. Coatings: the company plans to develop 20 coating bases during the 14th Five Year Plan period, build a coating revival platform through acquisition, self construction and cooperation, and realize the national and full category layout of architectural coatings and industrial coatings.
In the first year of management reform, welcome the new driving force of growth. Great changes have taken place in the board of directors and management of the company. On April 13, 2022, the resolution of the company's shareholders' meeting announced that President Yin Zibo was elected chairman and President Jia Tongchun was elected vice chairman. General manager Ren Li, the managing director, has served as general manager and deputy general manager respectively in February 2022. Chairman Jia and general manager Ren of Taishan gypsum, the core subsidiary, entered the board of directors and senior management respectively, which will further integrate and deepen the gypsum board business. The management structure has also been adjusted. There are Beijing New Building Materials Public Limited Company(000786) dragon brand company, Taishan gypsum, mengpai new materials, Beixin waterproof, Beixin coating, Beijing New Building Materials Public Limited Company(000786) international, China building materials innovation and Technology Research Institute, China building materials Suzhou waterproof Research Institute and other sector companies. The inheritance and restart of Beixin's high-quality business philosophy is worth looking forward to.
Investment suggestion: we believe that the total demand of gypsum board is strong, the cost advantage + high market share bring strong pricing power, and the medium and high-end brand has great prospects; Large and small "wings" actively build the second growth curve; 2022 coincides with the first year of management reform. The inheritance and restart of the company's high-quality business philosophy is worth looking forward to. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be RMB 4.04 billion, RMB 4.87 billion and RMB 5.54 billion, corresponding to 13, 10 and 9 times of PE. PE and Pb are in the low central position in the past decade, with both growth and value attributes, maintaining the "buy" rating.
Risk warning: the cost of raw materials and fuel fluctuates greatly; The gypsum board brand is medium and high-end, and the overseas business expansion is less than expected; Keel, powder mortar, waterproof and coating and other new business development is less than expected; Reference information lag risk.
