\u3000\u3 China Vanke Co.Ltd(000002) 372 Zhejiang Weixing New Building Materials Co.Ltd(002372) )
Event overview
The company announced the first quarterly report of 2022. In 2022q1, the company realized a revenue of 1.01 billion yuan, a year-on-year increase of + 12.21%, and a net profit attributable to the parent company of 117 million yuan, a year-on-year increase of + 3.87%.
In line with expectations, housing construction rebounded and the retail end grew steadily. The company's performance basically meets our expectations. In 2022q1, the company continued to promote the sinking of channels, improve the network density, and strengthen the supporting sales of products. At the same time, the real estate engineering end has recovered, so that the company's revenue has maintained a stable growth. We estimate that the overall sales volume of the company will increase by about 5-10%. In terms of sub channels, the growth rate of housing construction and retail is higher, while the demand of municipal engineering is still under certain pressure.
The cost of raw materials remains high, and the amortization expense is reduced to alleviate the pressure on profits. In 2022q1, although the price of raw materials has dropped compared with 2021q4, it is still high on the whole (it is judged that 2022q1 also partially uses the high-priced raw materials of 2021q4). In addition to the raw material factors, we judge that the epidemic control in East China was upgraded in the second half of March, which affected the company's production and delivery, and also had an adverse impact on the cost side, making the company's gross profit margin continue to decline slightly month on month, The decline in gross profit margin is the main reason why the company's revenue growth is higher than its profit. However, due to 2022q1, the company's incentive expenses accrued and amortized decreased year-on-year, and the company's management expenses decreased year-on-year, which alleviated the company's profit pressure to a certain extent, making the company's Q1 profit achieve stable and positive growth.
Q2 performance is expected to be affected by the epidemic, but the system integration strategy supports long-term growth. With the further upgrading of epidemic control in East China in April, we expect that the retail delivery of Q2 company will be affected to some extent, which will put great pressure on the company's short-term performance. However, we believe that the above demand is expected to be released in 2022h2. At that time, the state is expected to further relax the regulation policy and stabilize the economy. The overall impact may be limited throughout the year. Since 2021, the company has accelerated the supporting sales of waterproof and water purification products and pipe products. At the same time, it has acquired Singapore jieliu to make up for the relatively weak drainage field in the past, and gradually cut into the field of fresh air and floor heating to transform into a house wide water system integration service provider. As the output value of single house with front waterproof, water purification, fresh air and floor heating is significantly higher than that of plastic water pipes, with the further development of the company's channel coordination, the output value of single house of the company is expected to be further improved to support the long-term growth of the company.
Investment advice
Keep the profit forecast unchanged. It is estimated that from 2022 to 2024, the company's revenue will be 7.39/84.4/9.48 billion yuan, with eps0.1 billion yuan 97 / 1.12/1.23 yuan, corresponding to the closing price of 18.73 yuan on April 27, 19.32/16.75/15.24xpe. Considering that the epidemic control has a great impact on the retail end in the short term, from the perspective of caution and referring to the historical valuation, the valuation multiple is reduced to 2022x27pe, and the corresponding target price is reduced to 26.19 yuan (Original: 28.90 yuan). Considering that the medium-term growth is still excellent, the "buy" rating is maintained.
Risk tips
Demand is lower than expected, cost is higher than expected, systemic risk
