\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 37 Keshun Waterproof Technologies Co.Ltd(300737) )
Core view
The price rise of raw materials + provision for bad debts dragged down the annual performance, and 2022q1 continued to be under pressure year-on-year. In 2021, the company achieved a revenue of 7.77 billion yuan, a year-on-year increase of + 24.6%, and a net profit attributable to the parent company of 670 million yuan, a year-on-year increase of – 24.5%, basically in line with the previous performance forecast, deducting a net profit not attributable to the parent company of 570 million yuan, a year-on-year increase of – 35.4%, and EPS (basic) of 0.6 yuan / share. The decline in performance was mainly due to the drag of the sharp rise in the price of raw materials such as asphalt and the provision for bad debts of receivables. 2022q1 was under further pressure, with a revenue of 1.74 billion yuan, a year-on-year increase of + 18.7%, a net profit attributable to the parent of 99 million yuan, a year-on-year decrease of – 40.8%, and a deduction of non attributable net profit of 82 million yuan, a year-on-year decrease of – 49.2%.
Profitability was suppressed by rising costs, and the gross profit margin improved month on month in 2022q1. In 2021, the company’s overall delivery maintained a steady growth, and the sales volume of waterproof materials was + 29.45% year-on-year; In terms of products, the construction income of waterproof coiled material / waterproof coating / waterproof engineering was 4.55/16.8/1.53 billion yuan respectively, with a year-on-year increase of + 12.2% / + 46.2% / + 54.4%, the gross profit margin was 32.7% / 22.1% / 23.0%, a year-on-year increase of – 6.6pp / – 13.1pp / – 7.1pp, and the comprehensive gross profit margin was 28.5%, with a year-on-year increase of – 8.4pp, which was mainly affected by the sharp rise in the price of raw materials and the superposition of some product structures. During the period, the expense rate was 14.7%, with a year-on-year rate of -0.36pp. The overall optimization trend continued, and the net interest rate was 870 million yuan, with a year-on-year rate of -5.6pp. The gross profit margin of 2021q1 is 25.7%, with a year-on-year ratio of – 1.4pp and a month on month ratio of + 3.6pp. After two rounds of price increases from February to March, it is expected that the pressure is expected to be transmitted to a certain extent.
The operating cash flow was generally stable and the debt ratio increased. In 2021, the net operating cash flow was 610 million yuan, with a year-on-year increase of + 10.7%, a cash to receive ratio of 88.4%, a year-on-year increase of -0.95pp, a cash to pay ratio of 85.5%, and a year-on-year increase of -15.4pp. The sales collection was generally good; By the end of 2021, accounts receivable and bills had amounted to 4.1 billion yuan, with a year-on-year increase of + 36.9%. The scale was generally controllable. The asset liability ratio was 54.0%, with a year-on-year increase of + 4.9pp. The debt ratio increased, mainly due to the increased demand for capital for the construction of production bases and the increase of long-term loans of 650 million to 860 million yuan.
It is proposed to issue convertible bonds to improve the industrial layout and help improve the quality and efficiency of production. On April 28, the company announced that it plans to issue convertible bonds to unspecified objects to raise no more than 2.2 billion yuan. After deducting the issuance expenses, it will be used for Anhui Chuzhou waterproof material expansion project, Fujian Sanming waterproof material expansion project, Chongqing Changshou waterproof material expansion project, intelligent upgrading and transformation project and supplementary working capital. It is expected to further improve the industrial layout. At the same time, intelligent upgrading and transformation will help improve the quality and efficiency of production.
Risk warning: the price rise of raw materials exceeds expectations; Capacity release is less than expected; The collection is less than expected
Investment suggestion: the “double ten billion” strategy is advancing steadily. Convertible bonds help to expand production capacity. As one of the leaders of waterproof materials in China, the “buy” company actively carries out business layout around the “double ten billion” strategy and relevant objectives. The issuance of convertible bonds is expected to further improve the production layout and lay a foundation for long-term development. At the same time, it has successfully acquired Fengze shares, officially entered the vibration reduction and isolation industry and explored the second growth point, Continue to be optimistic about the medium and long-term growth of the company. It is estimated that the EPS of 22-24 years will be 0.81/1.09/1.46 yuan / share respectively, and the corresponding PE will be 12.8/9.5/7.1x, maintaining the “buy” rating.
