\u3000\u3 China Vanke Co.Ltd(000002) 410 Glodon Company Limited(002410) )
Event:
The company released its first quarter financial report on April 26, 2022. During the reporting period, the total operating revenue was 1.131 billion yuan, a year-on-year increase of 33.2%, the net profit attributable to the parent was 109 million yuan, a year-on-year increase of 41.9%, and the net profit not attributable to the parent was 94 million yuan, a year-on-year increase of 25%.
Investment summary:
The cost business continues to stabilize the basic market. According to the company, the main factor of revenue growth in the first quarter still lies in the rapid growth of digital cost business. With the complete completion of the cost cloud transformation this year, Glodon Company Limited(002410) ‘s basic market will become more and more stable.
The comprehensive gross profit margin fell year-on-year and improved significantly month on month. The company’s Q1 comprehensive gross profit margin was 85.4%, down 4.4pct year-on-year, but increased by 7.7pct month on month compared with Q4 in 2021. We believe that the core factor affecting the company’s gross profit margin is the hardware procurement cost of digital construction business, which fell year-on-year in the first quarter. The reason for the significant improvement month on month lies in the business structure of the company’s revenue and cost to a certain extent. The business strategy of the company’s construction business in 2021 is mainly contract in the first half of the year and delivery in the second half of the year. As a result, the proportion of revenue and cost of construction business in the first half of 2021 is low and the gross profit margin is high, while the opposite is true in the second half of the year. The company’s gross profit margin increased slightly by 84.84% compared with that in 2021.
During the period, the expense rate decreased by about 5pct year-on-year, which helped to increase the net interest rate attributable to the parent company. While increasing R & D investment and the construction of sales system and management organization system, the company’s ability to control expenses has been continuously enhanced. The total expense rate during Q1 sales was 74.53%, a year-on-year decrease of nearly 5pct. Therefore, in the case of year-on-year decline in gross profit margin, the company’s Q1 parent net profit margin still increased slightly by about 0.59pct year-on-year, reaching 9.62%. We expect that the construction business in the second quarter will be affected by the local epidemic, but the impact is generally limited.
Under the current round of epidemic, construction projects in many cities have been intermittently suspended. We believe that the epidemic has little impact on the cost business, and the full coverage of the current subscription system model across the country will show its advantages in smoothing the impact of the epidemic in the downstream cycle and local areas.
From the perspective of contract implementation and delivery, we believe that the construction business may be affected to some extent in the second quarter. However, according to the past data, the East China region of Shanghai, where the current epidemic situation is relatively severe, accounts for about 17% of the Glodon Company Limited(002410) total revenue. It is estimated that the annual revenue of a single Shanghai region may account for about 5%, and the scale proportion is not concentrated. According to the current situation, the epidemic is expected to be effectively controlled in May. In the second half of the year, with the requirements of epidemic prevention and control, the project site may accelerate the promotion of digital solutions and strengthen the management of construction personnel. Therefore, from the perspective of the whole year, we believe that the impact of the current local epidemic on Glodon Company Limited(002410) performance is limited.
Investment suggestion: we are still optimistic about the growth and development of Glodon Company Limited(002410) as a leading manufacturer of digital platform services in the construction industry under the rigid demand of industry transformation and upgrading. It is estimated that the net profit attributable to the parent company of Glodon Company Limited(002410) from 2022 to 2024 will be 984 / 1333 / 1945 million yuan respectively, and the corresponding EPS will be 0.83/1.12/1.63 yuan respectively, with a year-on-year increase of + 48.9% / + 35.5% / + 45.9%. Maintain the “buy” rating.
Risk tip: the digital transformation of the industry is not as expected; The construction industry has entered a downward cycle; Intensified competition in digital construction business; Technological advancement is less than expected
