\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 031 Sany Heavy Industry Co.Ltd(600031) )
Event: the company released its annual report. In 2021, it achieved a total revenue of 106873 billion yuan (including auto finance business revenue of 760 million yuan), a year-on-year increase of 6.82%, and the net profit attributable to the parent company was 12.033 billion yuan, a year-on-year decrease of 22.04%; Q4 alone achieved a revenue of 18.592 billion yuan, a year-on-year decrease of 30.18%, and the net profit attributable to the parent company was -533 million yuan, a year-on-year decrease of 117.89%.
Core view: the performance is slightly lower than expected, mainly due to Q4 loss. Previously, the market expectation has been lowered. Reasons for loss: ① decline in industry demand: the sales volume of Q4 excavator industry in 2021 was – 30% year-on-year; ② Pressure on the expense side: the sales and R & D expense rates of single Q4 are + 2.6 and 3.8 PCT respectively year-on-year. In terms of absolute amount, they are 1.58 and 2.12 billion respectively, maintaining a relatively high investment level, mainly including sales commission / bonus, dealer assistance, maintaining R & D intensity, etc. Leading construction machinery companies have experienced the tests of the industry’s upward and downward periods. In the current downward stage of the industry, they actively layout digitization and international transformation and upgrading, rely on innovation to create a deeper moat, continuously strengthen their global competitiveness and have medium and long-term configuration value.
The market share of leading products has been continuously increased, the core competitiveness has been enhanced, and the overseas sales of various products have achieved rapid growth:
(1) excavator: the revenue was 41.75 billion yuan, with a year-on-year increase of 11.3%, accounting for 39.1% of the total revenue. Compared with the excavator industry, according to the data of China Construction Machinery Industry Association, the annual sales volume was 343000 units, with a growth rate of 5%. The company’s sales volume exceeded 100000 units, with a year-on-year increase of about 10%. The market share increased significantly, and it won the global sales champion again and again. In terms of export, the company exported 229.35 million excavators, a year-on-year increase of 112%, accounting for 33.5% of the export of the whole industry, and realized a revenue of 10.7 billion yuan, a year-on-year increase of 101%.
(2) hoisting machinery: the revenue was 21.86 billion yuan, a year-on-year increase of 12.6%, accounting for 20.5%. From the perspective of industry sales volume, according to the data of China Construction Machinery Industry Association, the overall sales volume of cranes is about 79000 units, with a year-on-year increase of 1%, including 50000 truck cranes and 4000 crawler cranes, with a year-on-year increase of – 8% and + 22% respectively. Thanks to the demand of overseas and wind power hoisting for medium and large crawler cranes, the sales volume of crawler cranes has reached a record high; In terms of the company, the market share of truck crane has increased to 31%, and the market share of crawler crane has exceeded 40%, among which the share of medium and large equipment has increased significantly. In terms of export, the revenue was 4.09 billion yuan, a year-on-year increase of 137%.
(3) concrete machinery: the revenue was 26.67 billion yuan, a year-on-year decrease of 1.4%, accounting for 25%, of which the revenue of puma was about 5.8 billion yuan, a year-on-year increase of 16%. Overseas sales revenue reached 7.11 billion yuan, a year-on-year increase of 24%, ranking the first brand in the world.
(4) piling and pavement machinery: the revenue was 5.17 billion yuan and 2.71 billion yuan respectively, with a year-on-year decrease of 24.3% and 3.5% respectively, accounting for 4.8% and 2.5% respectively. Among them, the market share of paver exceeded 30%, ranking first in China. In terms of export, the sales of other products except excavators, cranes and concrete machinery reached 2.95 billion yuan, a year-on-year increase of 121%.
The decrease of gross profit margin put pressure on profitability, and the overall operation remained stable:
(1) gross profit margin: in 2021, the gross profit margin of the company’s overall sales was 25.85%, a year-on-year increase of -3.97 PCT, mainly due to the significant increase in raw materials and freight; In terms of products, the gross profit margin of all kinds of products decreased by different ranges. The gross profit margin of excavators, concrete machinery and cranes were 28.94%, 24.99% and 19.59% respectively, with a year-on-year decrease of -5.73, – 2.31 and -2.08pct respectively. Among them, the gross profit of excavators decreased more, mainly due to ① price side: the company increased its support to dealers and affected the unit price through rebate, marketing incentive and other means; ② Cost side: the cost of raw materials and freight increased significantly. The company realized hedging through process optimization, centralized procurement and other means.
(2) net profit margin: in 2021, the company’s overall net profit margin of sales was 11.62%, with a year-on-year rate of -4.35pct, and the expense rate during the period was 14.83%, with a year-on-year rate of + 2.03pct. Among them, the expense rates of sales, management, R & D and finance were + 0.94, + 0.39, + 1.1 and -0.4pct respectively year-on-year. The rate of sales and R & D expenses increased significantly, mainly due to the increase of agent assistance and the corresponding increase of sales commission, At the same time, it has maintained a high R & D investment in “two innovations and three modernizations”. The increase of the company’s other income and the tax deduction of R & D investment offset the impact of the increase of expenses on the net interest rate to a certain extent.
(3) strictly control operating risks and maintain overall stability: the company’s operating net cash flow is 11.9 billion, which is equal to the net profit. The cash received from selling goods and providing labor services increased by 2.99% year-on-year, the payment collection is good, and the overall overdue rate is less than 1%; The turnover rate of accounts receivable was 5.16, year-on-year + 0.57, and the inventory turnover rate was 4.18, which remained high.
The “two innovations and three modernizations” have been steadily promoted, and the overseas market has grown brightly: in 2021, the company’s R & D investment totaled 7.697 billion yuan, a year-on-year increase of 23%, accounting for 7.25% of revenue, a year-on-year increase of + 0.95 PCT, and the number of R & D personnel increased to 7231, a year-on-year increase of 35%. The company’s “two innovations and three modernizations” strategy (new products, new technologies, digitization, electrification and internationalization) has achieved remarkable results: ① digitization, while promoting the construction of 22 lighthouse factories, A total of 14 lighthouse factories have been built, with production capacity increased by 70% and manufacturing cycle shortened by 50%; ② In terms of electrification, 34 electric products have been developed and 20 have been listed. The sales volume of electric engineering vehicles has exceeded 1000, with a sales volume of nearly 1 billion yuan, and the market share ranks first in the industry; ③ In terms of internationalization, the international revenue in 2021 was 24.86 billion yuan, with a year-on-year increase of + 76.2%, accounting for 23.4%, and a year-on-year increase of + 9.2pct. The revenue growth rate in Asia, Australia, the Americas and Africa reached about 100%, and that in Europe also reached 42%. 68 international products were launched, the coverage of host models in overseas markets was further improved, the global share of excavator exceeded 6%, with a year-on-year increase of + 2pct, and the global comprehensive competitiveness continued to increase. The company adheres to the “two new and three modernizations” of high-intensity investment. From the perspective of long-term operation, it aims to consolidate the leading position in the industry, break the cyclical disturbance of a single market and move forward to the global leader of construction machinery.
Driven by the steady growth policy, it is expected that the overall performance of the industry in 2022 will be “low before high”, and the inflection point is expected at the end of the second quarter: from the perspective of the whole year of 2022, the steady growth policy will be implemented in an orderly manner, there are plenty of terminal projects to be started, and the peak construction season is expected to usher in in the second quarter. At the same time, with the gradual easing of high base pressure, the growth performance of the industry is expected to rebound in a “V” shape. Under the four scenarios of – 20% (pessimistic), – 10% (neutral pessimistic), 0% (neutral) and 5% (cautiously optimistic) of the growth rate of the excavator industry, according to the proportion of monthly sales in the past five years, the growth rate of the industry in 2022 is “low before high”. Under the neutral pessimistic expectation, assuming that the growth rate of the industry in 2022 is – 10%, the annual sales volume is expected to be 308500 units, and the monthly growth rate is expected to change from negative to positive in August.
Investment suggestion: considering that the construction machinery industry has entered the adjustment stage and the prosperity has declined, the profit forecast is lowered out of the principle of prudence. It is estimated that the company’s revenue will be 101.71 billion yuan, 104.02 billion yuan and 111.87 billion yuan respectively from 2022 to 2024, with a year-on-year increase of – 4.8%, + 2.3% and + 7.6% respectively; The net profit attributable to the parent company was 9.77 billion yuan, 9.98 billion yuan and 10.7 billion yuan respectively, with a year-on-year increase of – 18.8%, + 2.1% and + 7.3% respectively, corresponding to PE valuation of 15, 14 and 13X; Maintain the investment rating of Buy-A, and the six-month target price is 17.25 yuan, which is equivalent to the dynamic P / E ratio of 15 in 2022.
Risk tip: the growth rate of infrastructure investment has declined, and the effect of steady growth policy is not as expected; Overseas market development is blocked; Market competition intensifies
