\u3000\u3 China Vanke Co.Ltd(000002) 271 Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) )
Key investment points
The revenue increased against the trend in the first quarter, highlighting the leading position
Under the influence of the epidemic in 2022, the company’s revenue in the first quarter still increased by 17.31%. On the one hand, it is due to the fact that the waterproof industry is in the period of accelerated concentration and rapid increase of the company’s market share, on the other hand, it is due to the relatively small impact of the company’s national capacity layout and logistics delivery. Throughout the year, “infrastructure construction should be moderately advanced”. The following table shows that infrastructure construction will be an important starting point for steady growth, non real estate business is expected to meet growth, industry concentration is still in a period of rapid improvement, and has long-term growth.
Q1 gross profit margin declined, financial expenses and credit impairment losses contracted and thickened performance
The gross profit margin of Q1 in 2022 was 28.28%, down 2.03pct month on month, due to the decline of revenue scale, down 4.58pct year-on-year, mainly due to the impact of the price of raw materials such as asphalt. In March, the company announced that considering the rising pressure of raw materials, the price of some coiled materials and coating products will be increased by 10-20%. It is expected that the gross profit margin will continue to improve after Q2 is implemented.
During Q1, the expense rate was 19.06%, a year-on-year decrease of 0.8pct, of which the sales / management / financial expense rate was + 0.01 / – 0.07 / – 0.73pct year-on-year, and the increase in interest income reduced the financial expense. Meanwhile, the credit impairment loss during the period was 171 million, a year-on-year decrease of 42.31%, which was due to the decrease in the scale of new accounts receivable in the current period compared with the same period last year.
The payment collection was good in the first quarter, and the phased pressure on cash flow was due to the increase of expenditure
The cash outflow of the company was almost 2.48 billion, which was almost the same as that of q1-2024.4 billion, with a year-on-year increase of cash flow, which was mainly higher than that of q1-2024.4 billion. As of 22q1, the balance of other receivables dominated by performance bond was 3.514 billion yuan, a year-on-year increase of 357 million yuan; The inventory balance was 2.447 billion yuan, a year-on-year increase of 1.228 billion, which was due to the impact of raw material reserves and delivery rhythm.
Profit forecast and valuation
The company has established all-round leading advantages. With the continuous standardization of the industry, the market share will continue to increase. With the sinking of channels, the development of C-end and the expansion of categories, the company will continue to move forward to a platform enterprise of chemical building materials. It is estimated that the company’s revenue from 2022 to 2024 will be 40.3/49.2/59.6 billion yuan, with growth rates of 26.28% / 22.09% / 21.04% respectively, and the net profit attributable to the parent company will be 5.297/66.50/8.287 billion yuan, with growth rates of 25.99% / 25.53% / 24.62% respectively, and PE will be 22 / 17 / 14 times, giving it a “buy” rating.
Risk tips
The price rise of raw materials exceeded expectations, the demand for real estate and infrastructure fell short of expectations, and the growth of new categories fell short of expectations
