\u3000\u3 China Vanke Co.Ltd(000002) 271 Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) )
Event: the company released the first quarterly report of 2022. In 2022q1, the revenue was 6.309 billion yuan, a year-on-year increase of + 17.31%; The net profit attributable to the parent company was 317 million yuan, a year-on-year increase of + 7.07%; Deduct the net profit not attributable to the parent company of 297 million yuan, a year-on-year increase of + 8.52%. The company’s performance is in line with expectations.
Channel reform and category expansion continued to show remarkable results, and the high income in 2022q1 increased the pressure of hedging costs and expenses. In 2022q1, the company’s revenue increased by 17.31% year-on-year. Under the pressure of real estate demand, the revenue growth toughness appeared. We judged the reasons behind: 1) we continued to implement the channel reform strategy of deepening provincial and regional integrated operation, the expansion of engineering customers was more efficient, and the main waterproof industry grew steadily; 2) China Construction Group continued to carry out network layout, and the number of sales terminals increased, driving the rapid growth of revenue; 3) Category expansion has been effective and continued to contribute to income elasticity in large quantities. In 2022q1, the gross profit margin of the company decreased by 4.59 points year-on-year and 2.03 points month on month, mainly due to the sharp rise again under the catalysis of small probability events such as the Russian Ukrainian war after the cost of raw materials such as asphalt and lotion decreased in 2021q4. On the expense side, the expense rate during the period decreased by 0.8 percentage points year-on-year, mainly because the increase of interest income in 2022q1 led to the decrease of financial expense rate by 0.73 percentage points year-on-year. In addition, the corporate income tax rate in 2022q1 decreased by 2.13 points. Generally speaking, although the gross profit margin decreased year-on-year, it was hedged by the decrease of financial expense rate and income tax rate. Finally, the net profit margin in 2022q1 decreased by only 0.44 points year-on-year. 2022q1 company generated 63.32 million yuan of equity incentive expenses. If this part is deducted, the net profit attributable to the parent company increased by 20.83% year-on-year. The company’s performance growth showed strong resilience and demonstrated its leading nature under the downturn of real estate.
Against the trend, the production capacity continued to expand, and the bottom consolidated its leading position. The company also announced that it plans to invest 1 billion yuan to build Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) green building materials production base in Chenzhou, Hunan Province. Since 2021, the company has successively completed 8 billion fixed increase issuance and frequently deployed new production capacity bases across the country. Since 2021h1, the demand side of real estate has accelerated downward. After the end of the policy, we judge that it will gradually usher in the bottom of the fundamentals. The company will complete the capital reserve before the cold winter of the industry, The company also increased the nationwide layout and new category expansion against the trend. According to the data of the 2021 annual report, the growth rate of the company’s main business income was faster than that of the industry, the market share continued to increase, the company’s channel and financing strategy led the industry, and the contrarian expansion consolidated the leading position at the bottom.
Core logic: 1) under the trend of improving industry standards and downstream customer concentration, leading companies promote the steady increase of market share by virtue of leading advantages such as brand, channel, scale, capital, customer resources and management ability; 2) Relying on the resources and customer advantages accumulated by the core waterproof business, the company actively carries out business cooperation and fully extends to multiple fields (coating, thermal insulation, etc.) to contribute to the performance increment; 3) Channel sinking under the “integrated operation and management” of the company, effectively integrate key elements such as projects, channels and categories, expand non real estate business, expand affordable housing, urban renewal and other markets, and further consolidate competitive advantages; 4) With the promotion of the whole county, the photovoltaic roof waterproof market is expected to contribute new increment. The company has cooperated with many photovoltaic enterprises such as Jingao, and has sufficient TPO coil capacity support, so it is in a leading position in the competition.
Investment suggestion: the company’s performance is in line with expectations. We maintain the net profit attributable to the parent company in 22 and 23 years to be 5.24 billion yuan and 6.81 billion yuan respectively, corresponding to 22 and 17 times of PE, and maintain the “overweight” rating.
Risk warning: industry competition intensifies; Downstream real estate demand is lower than expected; The price of raw materials fluctuates greatly; The risk of rapid growth in the scale of accounts receivable.
