\u3000\u3 China Vanke Co.Ltd(000002) 541 Anhui Honglu Steel Construction(Group) Co.Ltd(002541) )
Q1’s overall operation is under pressure. It is expected to reverse after the epidemic and maintain the “buy” rating
The company released the first quarterly report for 22 years. In 22q1, the company achieved a revenue of 3.52 billion yuan, yoy + 7%, a net profit attributable to the parent of 167 million yuan, yoy-8.26%, a deduction of 97 million yuan of non net profit, yoy-23.95%. We believe that the production and sales base of 21q1 company is high, and 22q1 may be affected by the relatively weak demand and epidemic situation. In the case of weak output growth, the sales volume and ton net profit are also under pressure. The net outflow of CFO of Q1 company was 88 million yuan, a year-on-year decrease of 200 million yuan, and the cash to income ratio showed an improvement trend. We believe that the company has a significant cost advantage. Referring to the situation in 2020, after the impact of the epidemic is gradually reduced, the company is expected to make up for the current affected production and sales volume in the rest of the year, and the subsequent production and sales volume and ton net profit improvement path are still unblocked. It is expected that the net profit attributable to the parent company in 22-24 years will be RMB 1.40/17.5/2.03 billion, maintaining the “buy” rating.
Q1 production and sales volume and net profit per ton are greatly affected by industry factors
According to wind, the average price of 22q1 steel sector increased by about 6% – 8% on average, and that of 21q4 increased by 22% – 28% on a year-on-year basis, which is higher than the company’s Q1 revenue growth. We judge that the company’s Q1 sales volume may decline on a year-on-year basis. We believe that the prosperity of the downstream of fixed investment from January to February is relatively low. In March, although the outlook of fixed investment rebounded, East China is greatly affected by the epidemic, which may be the main factor affecting the company’s sales volume. The non net profit deducted from Q1 of the company decreased by 23.95%. We judge that in addition to the decline of sales volume, the net profit per ton may also decrease to a certain extent. The main reasons are as follows: 1) the output of Q1 company is 702000 tons, with a year-on-year increase of 2.2%. At the end of 21fy, the company’s production capacity is about 4.2 million tons, with a year-on-year increase of about 17%, and the utilization rate of Q1 production capacity has decreased; 2) Since March, the epidemic situation in East China has had a great impact, and the transportation cost may increase to a certain extent.
The management will continue to maintain an excellent level, the production capacity will continue to expand, and the follow-up advantages are expected to continue to expand
22q1 company’s sales / management / Finance / R & D expense ratio was 0.65% / 1.75% / 1.97% / 1.51%, with a year-on-year change of -0.18 / – 0.02 / – 1.18 / + 0.50PCT. The government subsidy decreased by 31 million yuan year-on-year, but the income from asset disposal increased by 54 million yuan year-on-year, making a great contribution to non recurring income. We believe that the scale effect of the company’s Q1 management side is still reflected. With the further upgrading of the company’s information system, the company’s management radius and scale effect are expected to be further improved. 22q1’s cash to cash ratio reached 121%, an increase of 10.83pct year-on-year. The construction in progress of 22q1 company increased by 258 million yuan compared with that at the end of 21fy, which is much higher than that at the same period last year. We believe that the company’s production expansion has maintained a steady progress, the scale advantage of subsequent production capacity is expected to be further expanded, and the production capacity advantage is expected to maintain the company’s order receiving and cost advantage.
Continue to be optimistic about medium and long-term growth and maintain the “buy” rating
Although the operation of Q1 company is under certain pressure, we believe that the medium and long-term growth of the company has not been affected, and the industry concentration may be accelerated in the downward period of the industry. We believe that if the epidemic situation returns to normal quickly, the company is still expected to catch up with the backward progress in the remaining time, and the profit forecast will not be adjusted for the time being. It is estimated that eps2 will be in 22-24 years 64 / 3.29/3.83 yuan, maintaining the “buy” rating.
Risk warning: the impact of the epidemic on the company’s production exceeded expectations; The recovery of industry demand is less than expected; The improvement of the company’s management radius was less than expected, resulting in a lower than expected increase in net profit per ton.
