\u3000\u300 Ping An Bank Co.Ltd(000001) 2 Csg Holding Co.Ltd(000012) )
Event: the company released the annual report of 2021, and the annual operating revenue was 13.629 billion yuan, a year-on-year increase of 27.72%; The net profit attributable to the parent company was 1.529 billion yuan, a year-on-year increase of 96.24%; The non net profit deducted was 1.44 billion yuan, a year-on-year increase of 166.59%; The net operating cash flow was 3.902 billion yuan, a year-on-year increase of 42.90%. 21q4 achieved an operating revenue of 3.382 billion yuan, a year-on-year increase of 5.6%; The net profit attributable to the parent company in the same period was 19 million yuan, a year-on-year decrease of – 62.86%; Deduct non net profit of – 26 million yuan, with a year-on-year increase of 80.21%.
The impairment of 21q4 affected the current performance, and the performance of float / electronic glass reached a new high in the whole year. In 2021, the revenue of float / Engineering / electronic / photovoltaic glass business of the company was + 47% / + 24% / + 75% / 0% year-on-year, and the net profit was + 170% / – 76% / + 46% / – 38% year-on-year. Among them, the performance of float and electronic glass business was a new high in recent years. In 21q4, the company continued to adjust its business and made provision for impairment of 438 million yuan, mainly about 175 million yuan for the backward technology production line of Qingyuan energy saving phase I electronic glass, 103 million yuan for the goodwill impairment of Shenzhen display company, 103 million yuan for the bad debts of engineering glass for Evergrande commercial acceptance bills and accounts receivable, and 4.44 million yuan for the depreciation reserves of inventories (mainly inventory commodities), Superimposed 21q1-q3 impairment provision, the total provision for asset impairment in the whole year was about 1.136 billion yuan. In the 21st year, a more comprehensive impairment test was conducted on the assets, and the burden was removed before starting. Affected by the rise of commodity prices such as raw material soda ash (national heavy soda ash price + 98% / 41.2%) and natural gas (National LNG price + 52.5% / 19.6%) and the decline of float price, the gross profit margin of 21q4 company was 27.6%, down 2.38/9.78pct year-on-year / month-on-month; During 21q4, the expense ratio accounted for 14.1% of the revenue, with a year-on-year increase of + 3.6pct, mainly due to the increase of sales / management expenses in the quarter. The company’s 21q4 notes receivable and accounts receivable were – 15.6% year-on-year, and the net operating cash was + 19.9% year-on-year. Under the background of tight funds in the real estate chain, the company’s cash flow control and recovery ability were improved; 21q1-q4 investment cash expenditure was 3.4x/7.7x/7.1x/6.1x in the same period of 2020, which was mainly affected by the investment in fixed assets such as new production lines in various business segments.
Float actively reserves mineral resources, and Low-E capacity expansion increases the market share. Affected by the regulation of real estate, the price of float glass presents an inverted “V” trend throughout the year. Under the background of the rise in the price of bulk raw materials, on the one hand, the company’s float products are positioned for high-end differentiated competition, and the gross profit margin is guaranteed; On the other hand, the company plans and organizes the procurement of bulk raw material reserves, expands mineral resource reserves, improves production efficiency and effectively hedges the rising pressure of raw material costs. In terms of building glass business, 21q4 company’s provision of Evergrande business ticket affects the current profit. At present, the production capacity of Zhaoqing base (with an annual output of 2.5 / 3.5 million square meters of hollow energy-saving / coated energy-saving glass) and Tianjin expansion project (with an annual production capacity increased to 2.76 million square meters) is gradually released; In 2022, Wujiang engineering glass factory (new intelligent manufacturing line of hollow energy-saving glass with an annual output of 1.2 million square meters), Hefei energy-saving glass industry base and Xianning engineering production line reconstruction and expansion project (new hollow energy-saving / coated energy-saving glass with an annual output of 1.2 million square meters) are expected to be completed successively. In 2021, the company’s Low-E hollow glass will occupy more than 40% of China’s high-end market. With the new production capacity put into operation, The company’s high-end market share is expected to further improve. We believe that the demand for real estate completion remains resilient. At present, the biggest variable in the demand for float / building glass is the epidemic. With the continuous relaxation of local governments’ real estate policies, the effect of urban policies may gradually appear, and the orders postponed since the second half of last year may usher in a centralized release.
The performance of electronic glass has increased, and the technical iteration of high-end products has accelerated. In 2021, the production and sales of the company’s electronic glass business ushered in a significant growth, and the production / sales volume increased by 450.29% / 373.88% year-on-year. After the provision for the impairment of 175 million old equipment in Qingyuan front line, the company still achieved a net profit of 236 million yuan in the whole year. In terms of electronic display glass business, the company insists on accelerating product iteration. In the past 21 years, the orders of high aluminum second generation (kk6) electronic glass products have been released among Chinese high-end brand customers. The successful industrialization of Xianning kk6 plus has further improved the technical performance of products such as light transmittance, drop resistance and scratch resistance after strengthening. The verification of high aluminum third generation (kk8) products has also been completed, and the company has made a breakthrough in the technical upgrading of high aluminum electronic glass, In the field of high-end electronic glass, the competitiveness is improved, and the gross profit margin of kk6 / 8 products is high. With the spread of customer recognition effect, it is expected to drive the company’s performance in 22 years.
Photovoltaic glass continues to build new production capacity and provide medium-term increment. Affected by the high price of upstream silicon and other factors, the installed capacity of photovoltaic in 21 years is less than expected. However, during the 14th Five Year Plan period, the company is still optimistic about the development of photovoltaic glass sector due to the strong certainty of developing photovoltaic power generation and other new energy power systems. It is expected that in 2022, Anhui Fengyang 4 1200t / D and Hubei Xianning 1200t / D photovoltaic glass production lines will be ignited and put into operation in batches. At the same time, the company will accelerate the technical transformation project of Dongguan phase III 650T / D upgraded double glass calendering production line. In addition, the construction of 2 1200t / D photovoltaic calendering glass production line invested by Guangxi Beihai is under preparation. In the future, the new production capacity of photovoltaic glass will be about 8400t / D, ranking among the first echelon of photovoltaic glass. The company’s new production line has large melting capacity and high efficiency, which can meet the demand of increasingly large-scale components, and is expected to highlight the late development advantage.
Investment suggestion: after the impairment of the company is completed and the burden is removed in 21 years, taking into account the growth potential of many businesses of the company, we adjusted the net profit attributable to the parent company in 20222024 to be RMB 2.586/3.234/3.998 billion respectively, the corresponding EPS to be RMB 0.84/1.05/1.30 respectively, and the corresponding PE valuation to be 6.73/5.38/4.35 times respectively, maintaining the “buy” rating and the corresponding 22-year performance target price range to be RMB 10.92-12.6.
Risk tip: real estate investment has fallen sharply, the financing of real estate enterprises has been further tightened, the photovoltaic installation is less than expected, and the update speed of consumer electronics products has increased.
