\u3000\u30 Shenzhen Guohua Network Security Technology Co.Ltd(000004) 98 Shandong Hi-Speed Road&Bridge Co.Ltd(000498) )
Revenue performance has continuously increased higher than expected, and is expected to maintain a good momentum in 2022. The company announced that in 2021, it achieved an operating revenue of 57.5 billion yuan, an increase of 67.0% at the same time; The net profit attributable to the parent company was 2.13 billion yuan, an increase of 59.5% at the same time; The deduction of non performance was 1.94 billion yuan, an increase of 73.1% at the same time. The growth rate of deduction of non performance was significantly faster, indicating the strong growth of the company’s main business. In 2022q1, the company achieved a revenue of 10.5 billion yuan, an increase of 62% at the same time; The net profit attributable to the parent company was 240 million yuan, an increase of 48% at the same time, continuing the trend of high growth and exceeding expectations. The high growth of the company’s revenue performance is mainly due to the company’s: 1) continuous development of business fields such as municipal administration, industrial park and urban area development, and the increase of high-quality projects; 2) Implement a number of cost reduction and efficiency improvement measures to improve the profitability of the project; 3) During the reporting period, a number of M & A enterprises were added, and the production capacity of M & A enterprises in the previous year was gradually released. Quarterly, q1-4 single quarter revenue increased by 52% / 112% / 82% / 37% respectively; The net profit attributable to the parent company in a single quarter increased by 29% / 84% / 131% / 28% respectively, and the growth rate of Q4 performance slowed down, mainly due to the high base in the same period of last year (the same increase of 235% in 20q4 performance). In 2021, the bid winning amount of new orders signed by the company was 101 billion yuan, an increase of 44% at the same time. By the end of 2021, the total contract amount of the unfinished part of the company’s orders had reached 96.87 billion yuan, 1.7 times the annual revenue. According to the financial budget of the company in 2022, it is expected to achieve an operating revenue of 66.1 billion yuan and a net profit of 3.3 billion yuan, an increase of 14.9/19.9% respectively compared with the actual value in 21 years. According to the situation of the past three years, the company will generally significantly exceed the plan at the beginning of the year, and is expected to maintain rapid growth this year.
In 2021, the gross profit margin continued to rise, and the annual average roe increased to 19.3%. In 2021, the company’s comprehensive gross profit margin was 11.77%, yoy + 1.39 PCT, and its profitability increased steadily. The main reason is that the company continued to reduce construction costs and improve project management level by relying on cost reduction and efficiency improvement measures such as standardized construction and internal resource allocation. During the period, the expense rate was 5.45%, yoy + 0.37 PCT, of which the sales / management / R & D / financial expense rate was yoy + 0.02 / + 0.09 / + 0.02 / + 0.24 PCT, and the financial expense rate increased significantly, mainly due to the significant increase in the financing demand of the whole year due to the increase of projects at hand. The impairment loss of assets (including credit) is about 300 million yuan more than that of the previous year. The gross profit margin of 2022q1 company is 9.91%, yoy-1.4 PCT, which is expected to be mainly due to the change of project settlement structure and the disturbance of epidemic situation; The expense rate during the period is 5.88%, yoy-0.91 PCT, which is expected to be mainly due to high income growth, diluted expenses and scale effect; The net interest rate attributable to the parent company is 2.24%, yoy-0.21 PCT. The net operating cash flow in 2021 / 2022q1 was – 2.36 / – 1.3 billion yuan, compared with a net inflow of 970 / 240 million yuan in the same period last year, mainly due to: 1) the company is in a high-tech long-term, concentrated construction projects and increased investment. 2) Some project owners pay the contract price through commercial bills. In 2021, the cash to cash ratio is 62% / 66% and yoy-8 / – 3 PCT respectively. In 2021, the annual average roe was 19.3%, yoy + 0.35 PCTs. In terms of splitting, the total asset turnover rate increased by 0.04 times year-on-year, and the equity multiplier increased by 0.09 year-on-year, driving the improvement of annual profit quality; Yopct-y net interest rate is 18.0.
Q1 the investment in transportation infrastructure in Shandong Province has increased rapidly, and the diversified territory such as railway and municipal administration has opened up new space. According to China transportation information network, Shandong’s transportation investment in the first quarter of this year totaled 53.6 billion yuan, a year-on-year increase of 35.9%. According to the work report of the provincial government in January, the investment in transportation construction in the province in 2022 is expected to exceed 270 billion yuan, an increase of 12% over the same period last year. The steady growth of transportation infrastructure is expected to increase. According to the provincial construction plan for a strong transportation Province in the 14th five year plan, 2527 kilometers of expressways and 2290 kilometers of high-speed railways are planned to be added, which is 19% / 68% higher than the actual mileage added in the 13th five year plan, and there is a broad space for transportation infrastructure. In addition to expressways, the company actively arranges the railway and rail transit markets, improves the transportation infrastructure construction system, and develops regional development, municipal, industrial parks and other businesses, which is expected to open up new growth space outside roads and bridges.
With the overweight support of major shareholders and resources in the province, the performance is expected to usher in sustained and high growth. For local governments, the use of equity financing of listed infrastructure companies not only complements some infrastructure funds, but also does not significantly increase hidden liabilities and leverage. Therefore, continue to expand the scale of local state-owned infrastructure listed companies and enhance their financing capacity in the capital market, which is in line with the development needs of local governments in the future. Shandong Province has large space for infrastructure investment, strong financial strength, sufficient resources and strong capital demand. The company is expected to gradually play a more important role in financing and construction in the future and obtain more resource support in the province. In 2020, Shandong Hi-Speed Company Limited(600350) group and Qilu transportation group merged to form a new Shandong Hi-Speed Company Limited(600350) group. The proportion of expressway investment and construction in the province increased from 39% to 94%. In the future, Shandong Hi-Speed Road&Bridge Co.Ltd(000498) the share of expressway construction in the province is expected to further increase. According to the plan, the total investment of expressways within the group is expected to be about 520 billion yuan during the 14th Five Year Plan period. It is estimated that 320 billion orders can be obtained according to the Shandong Hi-Speed Road&Bridge Co.Ltd(000498) historical average bid winning rate. The support of major shareholders and various resources in the province is expected to promote the rapid growth of the company’s performance in the 14th five year plan.
Investment suggestion: we estimate that the net profit attributable to the parent company from 2022 to 2024 will be 2.7/35/4.1 billion yuan respectively, with a year-on-year increase of 28% / 27% / 18%, EPS of 1.75/2.22/2.61 yuan respectively, and the corresponding PE of the current stock price is 4.9/3.9/3.3 times respectively. Considering the company’s good growth and low valuation in the future, the “buy” rating is maintained.
Risk tip: the investment in transportation infrastructure in Shandong province does not meet the expectations, the risk of decline in gross profit margin, the risk of project construction progress does not meet the expectations, and the support of major shareholders does not meet the expectations.
