\u3000\u3 China Vanke Co.Ltd(000002) 837 Shenzhen Envicool Technology Co.Ltd(002837) )
Event: on April 25, 2022, the company released the annual report of 2021 and the first quarterly report of 2022.
In 2021, the company achieved an operating revenue of 2.228 billion yuan, a year-on-year increase of 30.82%; The net profit attributable to the parent company was 205 million yuan, a year-on-year increase of 12.86%. In the fourth quarter of 2021, the company achieved an operating revenue of 725 million yuan, a year-on-year increase of 13.17%; The net profit attributable to the parent company was 54 million yuan, a year-on-year decrease of 9.66%. In the first quarter of 2022, the company achieved an operating revenue of 400 million yuan, a year-on-year increase of 17.10%; The net profit attributable to the parent company was 13 million yuan, a year-on-year decrease of 59.26%.
In 2021, the company’s performance increased rapidly, and the gross profit margin is expected to stabilize and recover: in 2021, the company relied on the advantages of brand, technological innovation and customer base, increased R & D investment, actively cultivated new businesses, and its overall operating performance hit a new record high, realizing an operating revenue of 2.228 billion yuan, an increase of 30.82% over the same period; The net profit attributable to the parent company was 205 million yuan, a year-on-year increase of 12.86%. In terms of business, the company’s computer room temperature control products achieved an operating revenue of RMB 1.198 billion in 2021, a year-on-year increase of 38.16%; The operating revenue of outdoor cabinet energy-saving temperature control equipment was 1.198 billion yuan, a year-on-year increase of 75.36%; Rail transit train air conditioning service achieved an operating revenue of 184 million yuan, a year-on-year decrease of 35.65%; The operating revenue of new energy vehicle air conditioner was 85 million yuan, a year-on-year decrease of 9.53%. The decline in revenue of rail transit train air conditioning services and new energy vehicle air conditioning was mainly affected by the delay in order delivery caused by the epidemic. Affected by adverse factors such as repeated outbreaks and rising raw material costs, the company’s gross profit margin is under pressure in the short term. In 2021, the gross profit decreased by 5.63 PCT to 29.35% year-on-year, and in 2022, Q1 decreased by 7.6 PCT to 27.38% year-on-year. Affected by the decline of gross profit margin, the net profit attributable to the parent company of Q1 decreased by 59.25% year-on-year to 13 million yuan in 2022. It is expected that in the future, with the stabilization of raw material prices and the continuous expansion of new products, the company’s gross profit margin is expected to stabilize and recover.
Improved expense control ability and good cash flow: thanks to good organization optimization and management improvement, as well as the continuous improvement of operation efficiency, the company’s sales expense rate decreased by 1.62pct to 7.82% year-on-year in 2021, and the management expense rate decreased by 0.68pct to 10.66% year-on-year. Due to the decline of gross profit margin, the net profit margin of the company decreased by 1.68pct to 8.92% year-on-year in 2021. Affected by the decline of net interest rate, the roe of the company in 2021 decreased by 1.14pct to 12.58% year-on-year. In 2021, the company’s collection capacity was improved, the accounts receivable decreased, and the net cash flow from operating activities reached 180 million yuan, a year-on-year increase of 175091%.
Computer room products continued to win the bid, and the contribution of energy storage business was significantly improved: in terms of computer room products, the company increased projects in micro modules, computer room integration and general contracting, effectively expanded the scale of revenue and improved the viscosity of customers. In 2021, the company successively won the bid for centralized procurement of China Mobile, China Unicom, telecom, Alibaba, Tencent, etc. The bid winning and subsequent delivery of these major projects will provide a solid foundation for the subsequent operating revenue of the computer room temperature control business. In terms of cabinet business, the company is the first manufacturer involved in the temperature control of electrochemical energy storage system in China. It has been in a leading position in China’s energy storage and temperature control industry for many years. It is also the main temperature control product supplier of many Chinese energy storage system providers. With the help of its brand advantages and customer base in the energy storage industry, the company has continued to actively expand customers at home and abroad and achieved remarkable results. In 2021, the company continued to enrich product links and optimize the end-to-end liquid cooling system to improve system performance and operation and maintenance efficiency. In 2021, the revenue from energy storage application was about 337 million yuan, about 3.5 times that of the previous year, and its contribution to the company’s business was significantly improved.
Investment suggestion: the company is a leading enterprise in precision temperature control, and its energy storage business is developing rapidly. We expect the operating revenue of the company from 2022 to 2024 to be RMB 3.057/4.214/5.533 billion respectively, with a year-on-year increase of 37.2% / 37.9% / 31.3%; The net profit attributable to the parent company was 281 / 418 / 566 million yuan respectively, with a year-on-year increase of 37.2% / 48.7% / 35.3%; The corresponding EPS is 0.84/1.25/1.69 yuan respectively. We gave the company 33 times PE in 2022, corresponding to the target price of 27.72 yuan, maintaining the “Buy-A” investment rating.
Risk tips: market competition intensifies, 5g and data center construction falls short of expectations, policy implementation falls short of expectations, credit impairment risk and raw material price fluctuation
