\u3000\u3 China Vanke Co.Ltd(000002) 381 Zhejiang Double Arrow Rubber Co.Ltd(002381) )
Event: on April 22, 2022, the company announced that the annual report of 2021: the company realized an operating revenue of 1.916 billion yuan in 2021, with a year-on-year increase of 5.80%; The net profit attributable to the parent company was 149 million yuan, a year-on-year decrease of 52.82%; The net profit attributable to the parent company after non deduction was 115 million yuan, a year-on-year decrease of 61.39%; The net cash flow from operating activities was 149 million yuan, a year-on-year decrease of 59.41%.
In Q4 of 2021, the company achieved an operating revenue of 582 million yuan, an increase of 8.66% year-on-year and 18.07% month on month; The net profit attributable to the parent company was 09 million yuan, a year-on-year decrease of 88.86% and a month on month decrease of 79.82%; The net cash flow from operating activities was 73 million yuan, a year-on-year decrease of 23.97% and a month on month increase of 602.73%.
Comments:
In 2021, the company achieved an operating revenue of 1.916 billion yuan, with a year-on-year increase of 5.80%. Due to the superposition of various adverse factors, the company still achieved the same increase in output and sales
In 2021, due to repeated global epidemics, obvious inflation trend, general rise in raw material prices, tight international shipping, sharp rise in transportation prices, fluctuation of RMB appreciation and other factors, the operation of the company has been affected to a certain extent. There are several reasons for the improvement of the company’s revenue: 1) give full play to the production capacity. In 2021, the capacity utilization rate of conveyor belts, the company’s main products, reached 96.73%. The company produced 652943 million square meters of conveyor belts, with a year-on-year increase of 14.08%, and sold 632666 million square meters of conveyor belts, with a year-on-year increase of 8.88%. 2) Actively adjust the sales model. In 2021, the company accurately grasped the market trend of rubber conveyor belt, formulated a practical marketing model, timely adjusted the sales strategy according to the changes of market sales, improved the internal linkage between pre-sales and after-sales, production and sales, technology and production, and increased the business increment of the project and construction materials industry. 3) Promote the application of new scenarios. On the basis of consolidating the existing market share, actively explore new sales channels and markets, and continue to improve the market share. Seizing the track in the incremental market, the company vigorously promotes the long-distance conveyor belt project, provides the overall solution of intelligent material conveying system, and solves the all-round needs of customers from products to services. In Q4 of 2021, the net profit attributable to the parent company was 09 million yuan, a year-on-year decrease of 88.86% and a month on month decrease of 79.82%; The decrease of Q4 net profit margin is due to the increase of raw material cost, which leads to the decrease of product gross profit margin.
In 2021, the net profit attributable to the parent company was 149 million yuan, a year-on-year decrease of 52.82%. The net profit was dragged down by the increase of raw material costs and the rise of sea freight
During the reporting period, the net profit attributable to the parent company was 149 million yuan, a year-on-year decrease of 52.82%; The net profit attributable to the parent company after non deduction was 115 million yuan, a year-on-year decrease of 61.39%. The year-on-year decrease in net profit was mainly due to the rise in raw material prices and sea freight prices, and the lag in the transmission of cost increases to the downstream.
According to Bloomberg, as of April 22, 2022, the freight rate of 40 foot TEU from China to the west of the United States in the FBX index was US $1576370/feu, 11.50 times higher than that in early 2020; The price from China to Europe is 1188200 USD / feu, which is 6.29 times higher than that at the beginning of 2020. The price from China to the east of the United States is 1714970 USD / feu, which is 6.47 times higher than that at the beginning of 2020.
During the reporting period, the prices of main raw materials of conveyor belt increased significantly, especially in the second half of 2021. According to the data disclosed in the annual report, in the second half of 2021, the price of natural rubber purchased by the company was 11508 yuan / ton, a year-on-year increase of 14.62%, and the price of synthetic rubber was 12639 yuan / ton, a year-on-year increase of 41.53%; The price of nylon canvas was 14.65 yuan / m2, with a year-on-year increase of 34.44%; The price of polyester canvas was 11.28 yuan / m2, with a year-on-year increase of 15.46%.
The capacity utilization rate reached 96.73%, and the launch of new capacity will further enhance the scale advantage
At present, the company has built a conveyor belt capacity of 75 million square meters / year, and achieved a capacity utilization rate of 96.73% in 2021, with a market share of about 13%. The company’s current strategy is to double the capacity and market share during the 14th Five Year Plan period, that is, the capacity will reach 150 million square meters / year. At present, Tongxiang Desheng’s annual output of 15 million square meters of high-strength steel wire rope core conveyor belt has entered the final stage of commissioning and trial production, The planning and design of fabric core conveyor belt with an annual output of 60 million square meters will be completed and will enter the construction period. With the continuous expansion of production capacity, the scale effect of the company is obvious. Production costs have been gradually reduced, product price advantages have been further highlighted, and market competitiveness has been continuously enhanced. At the same time, with the continuous promotion of supply side reform, the upgrading of environmental protection policies, the increase of the entry threshold of the rubber products industry, and the continuous elimination of small enterprises with insufficient qualifications, it is more conducive to the development of enterprises at the head of the conveyor belt, and the concentration of the conveyor belt industry is further improved.
Increased demand for long-distance conveyor belt projects
Due to the stricter requirements of the state on environmental protection and the demand of enterprises for energy conservation and efficiency, conveyor belt has obvious advantages in replacing truck transportation. Compared with truck transportation, conveyor belt transportation has the advantages of more environmental protection, energy conservation and efficiency. Therefore, the company’s downstream customers have gradually built long-distance conveyor belt projects in power, cement, steel, port and other industries in recent years to replace traditional highway transportation. With the increase of conveyor belt application scenarios, the demand for long-distance conveyor belts will increase steadily in the future.
Build intelligent factory and develop intelligent conveying system
On the one hand, the company invested 700 million yuan to build Taisheng intelligent “Tiantai intelligent manufacturing production base project”; The construction of a conveyor belt production line supporting intelligent warehouse with a construction area of 16000 square meters has been started in zhouquan headquarters; We continued to maintain high investment in information construction projects, further promoted the construction of digital workshop, and completed two major projects: APS production scheduling system and 5g network coverage of workshop 9. On the other hand, combined with the industrial Internet, the company develops intelligent material conveying system, and its main business applications are intelligent online monitoring, intelligent patrol inspection, general contracting service management, etc. Create value for users through energy conservation, emission reduction and efficiency enhancement of the conveying system, and finally help users achieve the purpose of carbon neutralization.
Steadily promote the development of pension industry
In 2021, the company will further expand and strengthen the elderly care industry, actively explore the way of combining “medical care and health care”, create a new municipal health care consortium, cooperate with Jiaxing kangci hospital, explore new topics of cognitive care, and create an innovative elderly care service with “smart elderly care” as the core. At the same time, the home business department has been established to create a “three-dimensional” pension model. Over the past year, by streamlining business processes, optimizing service projects, scientifically standardizing management, improving the business processing efficiency and management efficiency of elderly care institutions, reducing resource waste and improving the core competitiveness of the elderly care industry.
Expand sales scale and increase market share
In the stock market, the company will give full play to the advantages of existing technology, quality, brand and scale, increase the sales of new products, actively explore new sales channels and markets on the basis of consolidating the existing market share, and continue to improve the market share. Seizing the track in the incremental market, the company vigorously promotes the long-distance conveyor belt project, provides the overall solution of intelligent material conveying system, and solves the all-round needs of customers from products to services.
(1) implement multi brand strategy: produce high-end products (high added value) and personalized products with Zhejiang Double Arrow Rubber Co.Ltd(002381) headquarters to ensure sustainable development and strengthen the market leading position of Shuangjian brand.
Focus on standardized products with sub brands to further improve market share. (2) Promote project construction: accelerate the “strong energy-saving and environmental protection conveyor belt project with an annual output of 15 million square meters” of Desheng belt, improve the company’s production capacity, seize the market and increase the market share. Orderly promote the construction of Taisheng intelligent “rooftop intelligent manufacturing production base project”, and lay a foundation for the company’s plan to exceed 150 million square meters of conveyor belt capacity at the end of the 14th five year plan. (3) Use the industrial Internet to build an intelligent and information-based production base: the company will continue to invest funds to promote intelligent production workshops and intelligent storage projects, so as to further reduce staff and increase efficiency. At the same time, on the product side, industrial Internet technology is used to upgrade and transform products, so as to better serve the “new infrastructure” policy vigorously promoted by the state relying on 5g technology, and better promote the intelligent upgrading of downstream cement, steel, port, mining and other industries. (4) Enhance the brand image in the international market and expand the overseas market share: (5) continue to strengthen R & D and realize innovation drive: the company always takes technological innovation, optimizing product structure and improving product quality as the top priority.
Select good customers, fulfill good contracts, ensure capital recovery rate and reduce inventory
While actively expanding the market, the company strictly carries out customer risk assessment, selects customers, and formulates different collection policies for different customers to ensure that the risk of accounts receivable collection is controllable. The company strictly implements the company’s credit policy when signing the contract, receives the payment according to the contract during the sales process, and increases the collection of overdue receivables to strengthen the prevention of collection risk. At the same time, through full communication with customers, reasonably arrange production and reduce inventory according to customers’ actual needs.
Continue to expand and strengthen the elderly care and health industry and promote the transformation and upgrading of enterprises
In 2022, the company will continue to focus on efficiency and efficiency, focus on business and management innovation, and focus on the implementation of systems and work measures, so as to achieve the overall improvement of market share and work efficiency.
It is estimated that the net profit attributable to the parent company in 2022, 2023 and 2024 will be 213, 364 and 477 million yuan respectively, corresponding to 12.13, 7.09 and 5.41 times of PE, maintaining the “buy” rating.
Risk warning: raw material price fluctuation risk; Sea freight continues to rise; Product demand is less than expected; The payment collection of downstream customers is not timely; The construction progress of the project is less than expected.
