\u3000\u3 China Vanke Co.Ltd(000002) 541 Anhui Honglu Steel Construction(Group) Co.Ltd(002541) )
Event: the company released the first quarterly report of 2022. In the first quarter of 2022, the company achieved a revenue of 3.519 billion yuan, a year-on-year increase of 7.03%; The net profit attributable to the parent company was 167 million yuan, a year-on-year decrease of 8.26%; The net profit attributable to the parent company after deduction was 97 million yuan, a year-on-year decrease of 23.95%.
Revenue increased slightly and net operating cash flow improved. In 2022q1, the company achieved a revenue of 3.519 billion yuan, with a year-on-year increase of 7.03%. Covid-19 epidemic broke out in many places in the first quarter, and various local governments took sealing and control measures to varying degrees. Under this background, the company’s revenue still increased slightly, which is not easy. In 2022q1, the company realized a net profit attributable to the parent company of 167 million yuan, a year-on-year decrease of 8.26%, mainly due to the increase of transportation costs due to the outbreak of covid-19 epidemic in the first quarter; In recent years, the company has actively expanded production capacity and increased depreciation and labor costs, which finally led to the decline of net profit in the case of a slight increase in the company’s revenue in the first quarter of this year. The operating net cash flow of 2022q1 company was – 88 million yuan, a decrease of 200 million yuan compared with – 288 million yuan in the same period last year, mainly due to the better collection in the current period; The gross profit margin and net profit margin were 11.46% and 4.75% respectively, with a year-on-year decrease of 1.55 PCT and 0.79 PCT respectively; By the end of the first quarter of 2022, the company’s asset liability ratio was 61.52%, down 1.34 PCT month on month.
Newly signed sales contracts increased by 14.71% year-on-year. Q1 company’s newly signed sales contracts amounted to about 6.013 billion yuan, a year-on-year increase of 14.71%, all of which were material orders. In the first quarter, the price of hot rolled coil remained high. When the price of raw materials rose, the downstream customers of steel structure generally chose to postpone placing orders and purchase after the steel price fell. At the same time, the epidemic affected the downstream demand of steel structure. Under this background, the new sales contracts signed by the company in the first quarter still achieved double-digit growth. The steel structure output of Q1 company was about 702000 tons, with a year-on-year increase of 2.17%.
The policy is favorable for prefabricated buildings, the epidemic situation is accelerated, and the industry concentration is improved. Since the end of 2021, the construction departments of Huanggang and Shanghai have issued a notice that migrant workers over 60 years old are not allowed to enter the construction site in Hubei and Shanghai, and the construction departments of Huanggang and other similar areas are not allowed to enter the construction site in 2021. Compared with traditional building construction methods, prefabricated buildings have high efficiency and can greatly reduce manual dependence. They have obvious advantages, and prefabricated buildings are expected to benefit. Covid-19 epidemic broke out in many places across the country this year, which affected the downstream demand and production operation of the steel structure industry. There are a large number of enterprises in the industry. It is expected that the epidemic will accelerate the improvement of industry concentration. After the epidemic, when the demand recovers, the leader is expected to fully benefit.
Investment suggestion: it is estimated that the company’s revenue from 2022 to 2023 will be RMB 24.979/32.972 billion respectively, with a year-on-year increase of 28% / 32%, the net profit attributable to the parent company will be RMB 1.346/1.682 billion, with a year-on-year increase of 17% / 25%, EPS per share will be 2.54/3.17, corresponding to 16 / 13 times of the current share price PE respectively, maintaining the “recommended” rating.
Risk warning: the risk of sharp fluctuations in the price of raw materials; Risk of covid-19 epidemic affecting production; The risk of intensified industry competition.
