\u3000\u3 China Vanke Co.Ltd(000002) 372 Zhejiang Weixing New Building Materials Co.Ltd(002372) )
The company released the first quarterly report of 2022: in 2022q1, the revenue was 1.006 billion yuan, a year-on-year increase of + 12.21%, the net profit attributable to the parent was 117 million yuan, a year-on-year increase of + 3.87%, and the net profit deducted from non-profit was 113 million yuan, a year-on-year increase of + 4.64%. The gross profit margin and net profit margin of sales were 36.56% and 11.83% respectively, with a year-on-year increase of -2.29pct and -0.82pct.
In March, the camp was disturbed by the epidemic, and Q1 still achieved double-digit growth: the year-on-year growth rate of revenue in 2022q1 was 12.2%, and the growth rates in 2021q3-2021q4 were 15.8% and 25.3% respectively. The main reason is that the epidemic in East China has interfered with the operation since mid March, which is reflected in the closure of residential areas, the inability of door-to-door decoration, poor logistics and limited operation of factories, especially in East China, which accounts for the largest proportion of revenue (the revenue contribution in 2021 reached 51.19%); On the other hand, some benefited from the price increase, mainly due to the price increase for the whole series in 2021h1 and one price increase for PVC products in 21h1 and 21h2 respectively. In addition, it is expected that the waterproof and water purification business will continue to maintain a high growth rate.
The external environment is under pressure, and the profit increases against the trend:
Q1 external pressure is reflected in: 1) the price of raw materials is at a high level. In 2021, the revenue of PPR, PE and PVC products accounted for 48%, 27% and 16% respectively. In the first quarter of 2022, the price of PPR, PE and PVC raw materials was - 0.29%, + 6.05% and + 8.15% year-on-year (refer to the public data, there may be a difference from the real purchase price); 2) In March, the retail business was limited, and the proportion of low gross profit projects increased relatively; 3) The epidemic in East China affects logistics, and the transportation cost is expected to increase. Other profit interference items include: 1) investment income - 1988 million yuan, a year-on-year decrease of 10.3 million yuan; 2) It is estimated that the stock incentive fee will decrease by nearly 10 million yuan year-on-year; 3) Interest income decreased by 8 million + year-on-year.
The total expense rate of the company during the period was 19.78%, with a year-on-year rate of -2.99pct. The expense rates of sales, management, R & D and finance were 11.31%, 6.2%, 3.11% and -0.84% respectively, with a year-on-year rate of -1.42pct, -2.41pct, -0.09pct and + 0.93pct. The management expense ratio decreased year-on-year, mainly due to the decrease of amortization of restricted stock incentive expenses, and the financial expenses increased by 46.7% year-on-year, mainly due to the decrease of interest income in the current period. In addition, it is expected that the packaging expenses will have a slight impact on the same ratio of sales expenses and operating costs due to changes in accounting policies.
The net cash flow from operating activities is negative, mainly due to the impact of purchasing raw materials + taxes: the net cash flow from operating activities is - 70.55 million yuan, mainly due to the increase in raw material procurement and tax payment in the current period, which can be compared with 2020q1 and 2019q1, which are negative, respectively - 122 million and - 141 million. The company timely increased the stock of raw materials, and the price of raw materials increased significantly. The inventory at the end of the reporting period was 1.132 billion, and the prepayment increased by 33.58% compared with the beginning of the period (mainly due to the increase of prepayment for raw materials). The cash to income ratio in 2022q1 is 1.09 (1.26 and 1.18 in 20q1 and 21q1 respectively). 30% of receivable / income + is a normal performance in the first quarter. In the past 10 years, it only exceeds 30% in Q1. The monetary capital at the end of the period is 2.08 billion, there is no short-term debt and long-term debt, the financial expenses are negative, and the high quality of statements continues to be maintained.
Investment suggestion: we are optimistic about the impact of the smooth cycle of the company's consumption attributes and continue to maintain high-quality profits. In addition, according to the growth rate of the company's waterproof and water purification business in 2021 and the business objectives in 2022, we assume that concentric circles will continue to maintain a growth rate of more than 80%, which is expected to achieve about 10% of revenue this year, and the performance contribution is gradually obvious. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 1.604 billion yuan, 1.924 billion yuan and 2.311 billion yuan, and the corresponding dynamic PE of the stock price on April 27 will be 19x, 16x and 13X respectively. Maintain a "recommended" rating.
Risk warning: macroeconomic downside risk; Risk of price fluctuation of raw materials; Receivable risk of engineering business.
