\u3000\u3 China Vanke Co.Ltd(000002) 701 Org Technology Co.Ltd(002701) )
Event overview
Org Technology Co.Ltd(002701) released the annual report of 2021. In 2021, the company achieved a revenue of 13.885 billion yuan, a year-on-year increase of 20.22%; The net profit attributable to the parent company was 905 million yuan, a year-on-year increase of 19.68%; The net profit after deducting non-profit was 798 million yuan, a year-on-year increase of 53.09%. In Q4, the company realized a revenue of 3.254 billion yuan, a net profit attributable to the parent of 79 million yuan and a net profit of 13 million yuan after deducting non-profit. In terms of cash flow, the net cash flow from operating activities was 1.183 billion yuan, an increase of 51.35% over the same period last year, mainly due to the expansion of income scale in the current period, the increase of sales receipts and the increase of materials paid in the previous period.
Analysis and judgment:
Revenue side: stable development of traditional business and rapid growth of emerging business
During the reporting period, the company’s main products were metal packaging products and services. The three piece can business increased steadily, and the two piece can business performed well, with a total revenue of RMB 12.197 billion, a year-on-year increase of 17.95%. The company produced and sold 18.793/18.699 billion cans of metal packaging products, with a year-on-year increase of 19.23% / 19.15%. The company’s filling business grew steadily, with a revenue of 186 million yuan, a year-on-year increase of 13.54%. The company’s canned production and sales volume were 1019 million and 1012 million cans respectively, with a year-on-year increase of 35.51% / 28.95%. Focusing on the strategic direction of “packaging +”, the company also launched a series of private brand products. Other businesses achieved a total revenue of 1.502 billion yuan, a year-on-year increase of 43.75%.
Profit side: the price fluctuation of raw materials leads to the decline of gross profit margin
In terms of cost, the company’s overall gross profit margin in 2021 was 15.53%, down 5.34pct year-on-year, mainly due to the sharp fluctuation of raw material prices. The company’s overall net profit margin was 6.46%, down 0.26pct year-on-year. By product, the gross profit margin of the company’s metal packaging products and services was 16.62%, down 5.39 PCT year-on-year. In terms of expenses, the company’s period expense rate in 2021 was 8.13%, a year-on-year decrease of 2.80pct. Among them, the rates of sales, management and financial expenses were 1.15%, 4.02% and 2.6% respectively, down 0.62, 0.85 and 1.14 PCT year-on-year. The company’s R & D expense ratio fell 0.18pct to 0.36% year-on-year. The net investment income of the company was 251 million yuan, a year-on-year increase of 28.72%, mainly due to the investment income recognized by the equity method of equity investment projects.
Other important financial indicators
At the end of 2021, the company held 942 million yuan of monetary capital, a year-on-year decrease of 7.37%. The profit and loss from changes in fair value of the company was -154978 million yuan, mainly due to the decline in the fair value of other non current financial assets. The net cash flow from the company’s investment activities decreased by 167 million yuan year-on-year, mainly due to the recovery of investment from the disposal of some equity investment projects in the current period. The net cash flow from the company’s financing activities increased by 1.214 billion yuan year-on-year, mainly due to the raised funds of 1.069 billion yuan received from the issuance of convertible corporate bonds in 2020 and the payment of 399 million yuan for the equity of Hong Kong Jingshun for the implementation of business merger under the same control in the current period.
“Packaging +” opens a new space for growth
During the reporting period, the company focused on the strategic direction of “packaging +”, relying on the concepts of large consumption, great health and national tide, rooted in the traditional main business advantages in the packaging field, innovated and applied new packaging technologies and materials, and launched its own brand products. “Yuanyangwuyu” series of beverage products have helped “Yunnan goods out of the mountain” take a solid first step; “Xiwang” sports nutrition beverage has also started production and sales. Taking advantage of the opportunity of the Winter Olympic Games, the company cooperates with China Sports Industry Group Co.Ltd(600158) to create a new service ecology of sports marketing; The company’s Prefabricated vegetable products, hand in hand with local governments and well-known enterprises, and combined with the unique agricultural advantages of various regions, will launch green and healthy food to the market. We believe that the company relies on its advantages in technology research and development, intelligent manufacturing, Brand Co promotion, diversified marketing and other fields to move from the behind the scenes to the front end of the brand and open up new space for growth.
Investment advice
We believe that the competition pattern of the industry has been greatly improved. The development momentum of the company’s two-piece can business and filling business is good. The expansion of production capacity and the expansion of “packaging +” and other new businesses will provide support for the company’s future growth. Considering the company’s capacity expansion, we raised the company’s revenue forecast. From 2022 to 2023, the company’s operating revenue increased from 13.366/14.729 billion yuan to 15.381/16.776 billion yuan. However, considering that the upstream commodity price remained high, we lowered the company’s EPS forecast, and EPS decreased from 0.42/0.47 yuan to 0.39/0.43 yuan. It is estimated that the company will achieve revenue of RMB 17.813 billion and EPS of RMB 0.47 in 2024, corresponding to the closing price of RMB 4.95/share on April 22, 2022, and PE of 12.83/11.49/10.42 times respectively, maintaining the “buy” rating of the company.
Risk tips
1) Red Bull dispute. 2) The price of raw materials fluctuates. 3) The pattern of supply and demand has deteriorated.
