\u3000\u30 Ping An Bank Co.Ltd(000001) 57 Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) )
Event: on April 27, Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) released the first quarterly report of 2022, realizing a revenue of 10.012 billion yuan, a year-on-year decrease of 47.44%; The net profit attributable to the parent company was 906 million yuan, a year-on-year decrease of 62.48%.
Core view: performance meets expectations. The profit side fell more than the income side, mainly because the peak season was delayed under the disturbance of the epidemic, the scale effect of the company’s business was weakened, the cost of raw materials remained high, and the profitability was under pressure in the short term. From the perspective of the whole year of 2022, driven by the steady growth policy, the growth performance of the industry is expected to rebound in a “V” shape, and the decline of the company’s performance is expected to narrow quarter by quarter. With the company’s diversified business layout becoming more and more perfect and the orderly development of overseas markets, the ability to smooth China’s cyclical fluctuations is expected to be gradually enhanced in the future, highlighting the medium and long-term investment value.
The overall pressure in the first quarter, the company’s revenue performance is slightly better than that of the industry, and the decline in revenue is expected to gradually narrow in the second quarter: according to China Construction Machinery Industry Association, in the first quarter of 2022, the total sales volume of construction cranes (truck crane + truck crane + crawler crane) was 14554, a year-on-year decline of 51%, and the company’s revenue performance is slightly better than that of the industry. Disturbed by the epidemic since March, the commencement in many places was delayed, the logistics was limited, and the recognition of business income involving transportation and on-site installation acceptance was delayed. The company’s performance in the first quarter was under short-term pressure. Looking forward to the whole year, ① with the effective control of the epidemic and the expectation of demand recovery, the decline of the company’s top business income is expected to narrow quarter by quarter; ② The emerging business excavator and high machinery sectors are still in a period of large-scale growth. The diversified business layout combined with overseas expansion is expected to play a positive role in smoothing the fluctuation of performance.
The gross profit margin is under short-term pressure, and there is some room for repair: in the first quarter of 2022, the company’s sales gross profit margin was 20.07%, with a year-on-year rate of – 7.1pct, which was basically the same as Q4 in 2021. The main reasons are: on the one hand, the cost of raw materials and freight increased greatly; on the other hand, the demand decreased, and the scale effect weakened. We believe that the gross profit margin repair space mainly comes from the cost side: ① the cost pressure of bulk commodity raw materials is expected to ease within this year; ② Strengthen the management of parts supply chain and enhance the ability of cost control; ③ The epidemic situation is under normal control, and the logistics cost is expected to be controlled. From the expense side, the expense rate during the period was 12.62%, with a year-on-year increase of + 0.19pct. The expense rates of sales, management, R & D and finance were -0.55, + 1.04, + 0.08 and -0.38pct respectively year-on-year. The overall performance of expense control was basically stable. The net profit margin of sales was 9.35%, with a year-on-year decrease of -3.38pct, which was relatively small compared with the gross profit margin. It was mainly because the company received government subsidies, and other income reached 340 million yuan, with a year-on-year increase of 588%.
Driven by the steady growth policy, it is expected that the overall performance of the construction machinery sector in 2022 will be “low before high”: on April 26, the central finance and Economic Commission meeting further stressed the need to comprehensively strengthen infrastructure construction and build a modern infrastructure system, pointing out the need to strengthen the construction of network infrastructure such as transportation, energy and water conservancy, and focus on networking, network supplement and strong chain. From the perspective of the whole year of 2022, the steady growth policy is implemented in an orderly manner, and there are plenty of terminal projects to be started. It is expected to usher in the peak season of construction in the second quarter. At the same time, with the gradual easing of the pressure on the high base, the growth performance of the industry is expected to rebound in a “V” shape. Taking excavator as an example, we assume that the growth rate of the industry is – 20% (pessimistic), – 10% (neutral pessimistic), 0% (neutral) and 5% (cautiously optimistic). According to the proportion of monthly sales in the past five years, the growth rate of the industry in 2022 is “low before high”. Under the neutral pessimistic expectation, assuming that the growth rate of the industry in 2022 is – 10%, the annual sales volume is expected to be 308500 units, and the monthly growth rate is expected to change from negative to positive in August.
Investment suggestion: we estimate that the company’s revenue from 2022 to 2024 will be 66.68 billion yuan, 70.16 billion yuan and 75.8 billion yuan respectively, with year-on-year growth rates of – 0.7%, 5.2% and 8.0% respectively, and the net profit will be 5.35 billion yuan, 5.93 billion yuan and 6.68 billion yuan respectively, with year-on-year growth rates of – 14.7%, 10.9% and 12.7% respectively; Maintain the investment rating of Buy-A, and the six-month target price is 6.82 yuan, which is equivalent to the dynamic P / E ratio of 11.0 times in 2022.
Risk tip: the effect of steady growth policy is not as expected; Infrastructure investment is less than expected; The epidemic control was not as strong as expected; Market competition intensifies and the gross profit margin of products declines; The capacity launch of new products was less than expected.
