\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 37 Keshun Waterproof Technologies Co.Ltd(300737) )
Key investment points
Annual report: annual report of the company. In the 21st year, the revenue was 7.771 billion yuan, a year-on-year increase of + 24.57%, and the net profit attributable to the parent company was 673 million yuan, a year-on-year increase of – 24.45%; 22q1 achieved a revenue of 1.735 billion yuan, a year-on-year increase of + 18.71%; The net profit attributable to the parent company was 99.05 million yuan, a year-on-year increase of – 40.82%.
21q4 took the initiative to prevent risks and control delivery, and the revenue growth of 22q1 exceeded expectations. The revenue growth of Q1-Q4 in 2021 was 80.57% / 24.30% / 14.64% / 9.78% respectively. Since Q3, the company has made the strategic adjustment of “stable growth and risk control”, actively controlled the delivery, and the revenue growth has slowed down. In 2022, Q1’s revenue increased by 18.71%. Under the slowdown of big B business, the company maintained a high growth rate, mainly due to the rapid growth of distribution channels and civil construction channels.
21q4 impairment provision dragged down profits, and 22q1 was affected by the rise in the price of raw materials and the increase in expenses. Quarterly, the net profit margin of Q1-Q4 sales in 21 years was 11.45% / 13.17% / 10.57% / – 0.03% respectively. The main reasons are as follows: 1) the prices of core raw materials such as asphalt, lotion and polyether have risen sharply since Q2; 2) The provision for credit impairment in 2021 was RMB 4.9 billion, of which the provision for credit impairment in 2021 was RMB 4.9 billion. The net profit attributable to the parent company of 22q1 decreased by 40.82% year-on-year, mainly due to: 1) the average price of raw materials in 22q1 increased significantly compared with 21q1; 2) 22q1’s income accounted for a small proportion of the whole year, and the scale effect was not brought into full play. In addition, the increase of new employees at the beginning of the year led to the year-on-year increase of the cost rate during the period.
The operating cash flow remained stable in the whole year of 21 years, and 22q1 was under pressure in stages. The net cash flow from operating activities of the company in 2021 was RMB 611 million, with a year-on-year increase of 10.68%. 1) cash to cash ratio: the cash to cash ratio of the company in 2021 was 88.36%, with a year-on-year change of -0.96pct; 2) Cash ratio: in 2021, the company’s cash ratio was 85.47%, a year-on-year change of – 15.4pct. In 2022q1, the net cash flow from operating activities was -1.098 billion yuan, a year-on-year decrease of 301.74%, mainly due to the decrease in loan received and the increase in purchase payment.
Profit forecast and investment rating: as a waterproof leader, the company benefits from the improvement of industry standards and customer concentration; As the new bases are put into operation one after another, the distribution channels are accelerated, and the resource allocation and support for dealers are strengthened, the company is expected to continuously improve its market share. In addition, the company acquired Fengze shares to try category extension. At the same time, the company has sufficient incentives, improved management, improved quality and efficiency, so as to provide guarantee for the rapid development of the company. The company previously proposed to achieve sales of more than 10 billion yuan in 2022 and strive to achieve revenue of 20 billion yuan in 2025, demonstrating the company’s confidence in development. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 922 / 1294 / 1696 million yuan respectively, and the current market value corresponding to PE will be 13X / 9x / 7X respectively. The company plans to issue convertible bonds to raise funds, expand production and supplement current, so as to help the operation and development of the company. Considering the future growth flexibility of the company, the company will be given a “buy” rating for the first time.
Risk tip: the risk of fluctuation in the downstream real estate industry; Risk of sharp fluctuations in raw material prices; The risk of intensified industry competition; The risk of withdrawing large credit impairment losses.
