\u3000\u3 China Vanke Co.Ltd(000002) 511 C&S Paper Co.Ltd(002511) )
Event: the company announced in the annual report of 2021 that the operating revenue in 2021 was 9.150 billion yuan, with a year-on-year increase of 16.95%, and the net profit attributable to the parent was 581 million yuan, with a year-on-year decrease of 35.85%. The company plans to distribute a cash dividend of 1.00 yuan (including tax) for every 10 shares. According to the announcement of the first quarterly report of 2022, the operating revenue of Q1 in 2022 was 1.884 billion yuan, a year-on-year decrease of 10.36%, and the net profit attributable to the parent company was 133 million yuan, a year-on-year decrease of 50.82%.
Comments:
The revenue of 21q4 increased rapidly, and the high base of 22q1 declined. The single quarter revenue of 21q4 / 22q1 was + 26.75% / – 10.36% year-on-year respectively. The higher growth of Q4 was mainly due to the continuous volume of online channels; The net profit was – 58.72% / – 50.82% year-on-year respectively, mainly due to the fact that the sales price of main products did not meet the expectation, and the rise in the price of materials and energy raised the production cost. By category, the income of household paper / personal care / other products in 2021 was 8.658 billion yuan (+ 15.45%) / 77 million yuan (- 23.03%) / 415 million yuan (+ 85.4%), of which the growth of household paper income came from the continuous and rapid growth of e-commerce channel share. By region, the domestic / overseas revenue was 8.95 billion yuan (+ 16.96%) / 199 million yuan (+ 16.74%). In terms of sales mode, the revenue of traditional mode / non-traditional mode is 4.391 billion yuan (+ 3.45%) / 4.344 billion yuan (+ 29.48%) respectively. Among them, the growth of non-traditional mode sales revenue mainly comes from the company’s active expansion and development of channel construction, channel sinking and intensive cultivation. In terms of production capacity, the company currently has a production capacity of about 800000 tons. The new household paper projects include 400000 tons of high-grade household paper project and 300000 tons of bamboo pulp paper integration project in Sichuan. In the future, the company will steadily promote production capacity expansion according to the actual operation.
Rising costs affect short-term profits, which has improved month on month. In terms of gross profit margin, the gross profit margin of the company in 21q4 / 22q1 was 31.49% and 32.81% respectively. The gross profit margin of Q1 was -7.65pct year-on-year and + 1.32pct month on month; The gross profit margin of household paper / personal care products in 2021 was 36.99% (- 5.11pct) / 40.75% (- 22.54pct) respectively, which was mainly affected by multiple adverse factors such as lower than expected price increase of products, rising price of raw materials, fierce market competition, poor global supply chain and power / production restriction in some regions. The company has raised the price of some products since January 1, which is expected to ease the cost pressure to a certain extent. In terms of expenses, the rates of sales / management / R & D expenses in 2021 were 21.71% (+ 1.97 PCT) / 6.04% (- 1.06 PCT) / 2.32% (- 0.11 PCT) respectively. The increase of sales expense rate was mainly due to the construction investment of the company in expanding e-commerce channels; 22q1 sales / management / R & D expense rates were 17.71% (- 0.88pct) / 6.79% (+ 0.74pct) / 2.59% (+ 0.36pct) respectively. In terms of net profit, in 2021 / 22q1, the net profit attributable to the parent company was 6.35% (- 5.23pct) / 7.08% (- 5.82pct) respectively. In terms of cash flow, the operating cash flow in 2021 was 1.320 billion yuan, a year-on-year increase of 59.33%, and the operating cash flow in 22q1 was 247 million yuan, a year-on-year decrease of 26.1%.
Profit forecast: the company is a leading enterprise of household paper in China, constantly strengthening the proportion of diversified products such as high-end and high gross profit, precise brand marketing and layout Wuxi Online Offline Communication Information Technology Co.Ltd(300959) multi-channel, driving the continuous improvement of market share. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 668 million yuan, 773 million yuan and 888 million yuan respectively. At present, the share price (2022 / 4 / 27) corresponds to 20x PE in 2022.
Risk factors: market competition risk and raw material price fluctuation risk.
