\u3000\u3000 Xiamen Xiangyu Co.Ltd(600057) (600057)
It is expected that the net profit attributable to the parent company in 21q4 will increase by 51% – 70% year-on-year, and the high growth of performance is in line with expectations
The company adheres to the transformation to a comprehensive supply chain service provider, and the customer and product structure are continuously optimized. In 2021, the net profit attributable to the parent company was RMB 1.96-2.21 billion, with a year-on-year increase of 51% – 70%, far exceeding the profit assessment target of RMB 1.294 billion in 2021 in the stock option incentive plan. Among them, the company realized a net profit attributable to the parent company of 304-554 million yuan in 21q4. The overall performance is in line with expectations, and the effect of lean operation is obvious.
The whole industry chain service has been promoted in depth, and remarkable results have been achieved in improving quality and efficiency
The company’s profitability has been significantly improved in 2021. We judge that the main benefits are as follows: 1) in terms of business model, anchor the core demands of manufacturing enterprises and deepen the business model of “whole industry chain service”; 2) In terms of customer structure, improve the proportion of manufacturing customers, and explore the extended demand for high-quality customer service in stock; 3) In terms of profit contribution, the structure of service income, spread income and financial income was further optimized.
The sixth five year plan outlines the outline and is expected to build an international giant of bulk supply chain in the medium and long term
The company previously released the sixth five year plan, which requires to become a world-class supply chain enterprise and deeply cooperate with strategic manufacturing customers, so as to lead the positioning and upgrading. We are optimistic about the company’s three highlights and help build an international giant in the bulk supply chain: 1) the service value-added revenue gradually dominates and the unit profit increases steadily. For example, the company cooperates with Ali to build an agricultural industrial Internet platform to drive the quality and efficiency improvement of digital intelligent supply chain services; 2) The “whole industry chain service model” is replicated and extended to metal minerals, energy and chemical industry, new energy and other sectors to create a new profit growth pole; 3) The internationalization strategy has been solidly promoted and radiated around the world from the Southeast Asian market. The 2.5 million ton stainless steel smelting integration project in Indonesia has been put into operation and profitable in 2021. It is expected that the full operation will significantly improve the profit contribution of the project in 2022.
The relative growth of valuation is obviously low, and it is expected to maintain a relatively high dividend, both offensive and defensive
From the perspective of growth, according to our prediction, the compound growth rate of the company’s net profit attributable to the parent company from 2020 to 2023 is 29.1%, corresponding to peg = 0.32 < 1 in 2021, and the relative growth of the valuation is obviously low. From the perspective of underpinning, considering the setting of performance objectives in the equity incentive plan and referring to the company's dividend proportion of 56% (a year-on-year increase of 0.52pts) in 2020, it is assumed that the company's dividend proportion will remain 55% from 2021 to 2023. According to our prediction, the total dividend income from 2021 to 2023 will be as high as 20.9%. It has both attack and defense as a whole and strong certainty.
Profit forecast and valuation
It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 2.084 billion, RMB 2.422 billion and RMB 2.793 billion respectively, corresponding to 9.2 times, 8.0 times and 6.9 times of PE respectively. Considering the continuous optimization of the company’s business structure, customer structure, profit structure and commodity structure, as well as the enterprising power under endogenous incentives, maintain the “buy” rating.
Risk warning: the bulk price fluctuates violently; The promotion of industrial chain service model is less than expected; The promotion of international strategy was less than expected.
