\u3000\u3 China Vanke Co.Ltd(000002) 541 Anhui Honglu Steel Construction(Group) Co.Ltd(002541) )
Under the impact of the epidemic, Q1’s revenue performance did not meet expectations, and the follow-up rush is expected to promote the rapid recovery of operation. The company achieved a revenue of 3.52 billion yuan in 2022q1, an increase of 7% at the same time; The net profit attributable to the parent company was 170 million yuan, a decrease of 8% at the same time, and the net profit attributable to the parent company after deduction was 100 million yuan, a decrease of 24% at the same time. Q1 gross profit per ton calculated by output is 574 yuan and yoy-48 yuan; The net profit after deducting non-profit per ton is 137 yuan and yoy-47 yuan. Q1 revenue performance did not meet market expectations, mainly due to: 1) the current shortage of local government funds, superimposed on the impact of the epidemic in March, the construction progress of many projects slowed down, resulting in the slow delivery of goods by the owner, which dragged down the pace of revenue recognition of the company; 2) The transportation and delivery of finished products are affected due to logistics obstruction; 3) The attendance rate of employees in some production bases decreased due to epidemic prevention requirements; 4) We expect the company’s Q1 steel structure sales volume to reach 5 Shenzhen Zhenye(Group)Co.Ltd(000006) 00000 tons, which is basically the same as that of the same period last year. However, the company’s Q1 production capacity has increased significantly compared with the same period last year, the utilization rate of production capacity has decreased, and the proportion of depreciation and amortization of plant equipment has increased, affecting the company’s profit, gross profit per ton, net profit per ton and other indicators. The impact of the epidemic has a phased impact on the demand of the steel structure industry. The downstream customers of the steel structure are mainly infrastructure and industrial customers. Under the current economic downturn and the trend of the state vigorously promoting the investment in major infrastructure projects, it is expected that after the epidemic is controlled within the year, the demand of steel structure owners is expected to recover rapidly, promoting the company’s revenue and performance to return to growth.
The gross profit margin and expense rate decreased, and the cash flow outflow narrowed year-on-year. The gross profit margin of 2022q1 company is 11.5%, yoy-1.6 PCT, and the decline of gross profit margin is expected to be mainly due to: 1) the increase in the proportion of depreciation and amortization; 2) The Q1 steel price has increased significantly compared with the same period last year, and the gross profit margin has decreased under the condition of stable manufacturing and processing costs. During the period, the expense rate was 5.88%, yoy-0.87 PCT, of which the sales / management / R & D / financial expense rates were yoy-0.18 / – 0.02 / – 1.18 / + 0.51 PCT respectively. The R & D investment in Q1 decreased, and the increase of financial expense rate was mainly due to the increase of factoring collection expenses. The income tax rate is 32.2%, yoy + 6.1 PCT. The net interest rate is 4.8%, yoy-0.8 PCT. The net outflow of operating cash flow of Q1 company was about 88 million yuan, with a year-on-year decrease of 200 million yuan, which was mainly due to the company’s purchase of more steel in response to the rise of steel price in the same period last year, and the improvement of Q1 payment collection this year. The cash to cash ratio / cash to pay ratio is 121% / 118% respectively, and yoy + 11 / + 3 PCTs.
Large orders continued to increase, and the leading advantage continued to strengthen. 2022q1 company signed 6 billion yuan of new orders, an increase of 15% at the same time, all of which were material orders, including 2.2 billion yuan of large orders (orders with an amount of more than 100 million yuan or steel structure processing capacity of more than 10000 tons), an increase of 76% at the same time, accounting for 37% of the total orders, yoy + 13 PCTs; The processing volume of large orders totaled 340000 tons, an increase of 56% at the same time. The increase in large orders shows that the company’s major customer resources continue to be abundant. In terms of unit price, Q1 excludes the large order weighted average unit price of 7101 yuan / ton in the processing contract with incoming materials, with an increase of 8% at the same time. Under the background of rising steel prices, the company’s contract single ton price increases synchronously, showing a certain cost transfer ability.
Investment suggestion: we predict that the company’s net profit attributable to the parent company from 2022 to 2024 will be 13.0 / 16.3 / 2.01 billion yuan respectively, with an increase of 13% / 25% / 23% (CAGR from 2021 to 2024 is 20%), EPS will be 2.45/3.07/3.78 yuan respectively, and the current share price corresponds to 17 / 13 / 11 times of PE, maintaining the “buy” rating.
Risk tips: the impact of the epidemic exceeds the expected risk, the risk of capacity construction and capacity utilization is lower than the expected risk, the risk of steel price fluctuation, the risk of intensified competition, etc.
