\u3000\u30 Shenzhen Guohua Network Security Technology Co.Ltd(000004) 98 Shandong Hi-Speed Road&Bridge Co.Ltd(000498) )
Event overview.
The company announced the 2021 annual report and the 2022 quarterly report. In 2021, the company achieved a revenue of 57.52 billion yuan, a year-on-year increase of + 67.03%, and a net profit attributable to the parent company of 2.135 billion yuan, a year-on-year increase of + 59.48%; The corresponding Q4 revenue was 18.42 billion yuan, a year-on-year increase of + 36.50%, and the net profit attributable to the parent company was 837 million yuan, a year-on-year increase of + 28.18%. In 2022q1, the company's revenue was 10.53 billion yuan, a year-on-year increase of + 61.61%, and the net profit attributable to the parent company was 236 million yuan, a year-on-year increase of + 47.92%. The company announced that in 2022, it plans to realize revenue of 66.1 billion yuan (+ 14.91%) and net profit (including net profit attributable to parent company and net profit of minority shareholders) of 3.299 billion yuan (+ 19.93%).
Q1 performance exceeded expectations, and the high increase in orders led to performance growth.
The company's performance in 2021 was basically consistent with the data published in the performance express, and the performance of revenue and profit side in 2022q1 exceeded expectations. In 2021, the fixed investment in Shandong Province increased by 6.0%, the investment in roads and waterways increased by 9%, and the infrastructure demand increased steadily. At the same time, due to the merger of the second largest shareholder of the company in 2020, the market share of the company in the province increased, and the company acquired some enterprises outside the province, and the expansion outside the province accelerated. Therefore, the orders of the company increased rapidly, with the bid winning orders of 101 billion yuan and the newly signed orders of 86.8 billion yuan, a year-on-year increase of + 84.1%; In 2022q1, fixed investment in Shandong increased by 10.5% and investment in roads and waterways increased by 34%, reflecting the further acceleration of infrastructure demand. Under the background of the previous high increase in orders, the company's revenue and profit in 2022q1 achieved a high growth rate of 61.6% / 47.9% respectively, and the performance exceeded expectations.
Project optimization, cost reduction and gross profit margin increase. In 2021, in addition to consolidating the advantages of traditional road and bridge construction, the company actively explored business areas such as municipal administration, industrial parks and urban comprehensive development, and increased high-quality projects. In addition, the company actively implemented cost reduction and efficiency improvement measures, effectively reduced construction costs through standardized construction and internal resource allocation. Under the background of tight overall funds in the overall construction industry chain in 2021, the gross profit margin of construction business increased by 1.2 percentage points year-on-year, Reflect the enhancement of the company's overall competitiveness. The recovery of gross profit margin makes the increase of after tax profit of the company higher than the income in 2021. However, due to the increase of profit accounted by minority shareholders, the net profit attributable to the parent company is generally similar to the income of the company.
Limited cash flow risk. In the whole year of 2021, the company's net operating cash flow was - 2.356 billion yuan (2020: net inflow of 974 million yuan). In addition, in 2022q1, the company's net operating cash flow outflow was 1.3 billion yuan, which also increased significantly year-on-year (2021q1: net inflow of 240 million yuan), mainly due to the increase in the payment forms of commercial bills and the fact that some projects are still in the early investment stage. In 2021, the company's accounts receivable turnover days were 46.33 days, a year-on-year decrease of about 15 days, and the accounts payable turnover days were 191.26 days, a slight increase of about 10% over the same period, reflecting the improvement of the company's overall accounting period and the overall controllability of cash flow risk.
The 14th five year plan may enter a high growth cycle with flexibility and certainty. According to the relevant transportation planning of Shandong Province, during the 14th Five Year Plan period, Shandong is expected to add 555 / 505 / 140 kilometers of railway / Expressway / rail transit mileage every year, which is in the forefront of the country, significantly improved compared with the 13th Five Year Plan period, and there is sufficient space for infrastructure development. Under the background that the second shareholder of the company completes the merger, we believe that the company's orders in the province are expected to maintain a high growth rate during the 14th Five Year Plan period, and the company's expansion outside the province further enhances the company's certainty, Therefore, the 14th five year plan company is expected to enter a high growth cycle. Since most of the projects built by the company are road and bridge, rail transit, municipal and other projects that can stably generate cash flow, although the orders signed by the company in the form of investment / equity construction integration have increased, we expect that due to the stable cash flow income of the owner, the overall payment can be made on time, and the cash flow problem of the company does not need to be excessively worried. At present, the company's valuation is only about 5xpe, which has both flexibility and certainty in the target of stable growth. The high growth of Q1 performance is expected to further boost market confidence and excellent configuration cost performance.
Investment advice
Considering the relatively strong infrastructure planning in Shandong, the revenue forecast for 2022 / 2023 was raised to 74.67/96.48 billion yuan (Original: 72.63/91.07 billion yuan), the EPS forecast was raised to 1.75/2.34 yuan (1.69/2.16 yuan), the new revenue forecast for 2024 was 124095 billion yuan, the EPS forecast was 3.07 yuan, and the EPS from 2022 to 2024 corresponded to the closing price of 8.57 yuan on April 25, 4.89/3.67/2.79x PE. Keep the valuation of 6.5x 2022e PE unchanged, raise the target price to 11.38 yuan (Original: 10.99 yuan), and maintain the "buy" rating.
Risk tips
Demand is lower than expected, cost is higher than expected, payment collection is lower than expected, systemic risk
