\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 37 Keshun Waterproof Technologies Co.Ltd(300737) )
Event:
Keshun Waterproof Technologies Co.Ltd(300737) released the annual report of 2021: during the reporting period, the company achieved an operating revenue of 7.771 billion yuan, a year-on-year increase of 24.58%; The net profit attributable to shareholders of listed companies was 673 million yuan, a year-on-year decrease of 24.45%.
Key investment points:
The price of raw materials has risen sharply, and the profitability of the company is limited. In 2021, with the continuous expansion of business scale, the company’s operating revenue still maintained a growth trend, with an annual operating revenue of 7.771 billion yuan, a year-on-year increase of 24.58%. Affected by the international crude oil market, the price of asphalt, the main raw material of the company’s waterproof products, increased greatly, which had a certain impact on the company’s profitability. The company’s gross profit margin and net profit margin decreased by 8.43 and 5.61 percentage points respectively; In addition, due to the deterioration of the financial situation of downstream real estate enterprises, the company has accrued 275 million yuan for asset impairment. Affected by the sharp rise in costs and the provision for impairment, the company realized a net profit attributable to the parent company of 673 million yuan in 2021, a year-on-year decrease of 24.45%. The company’s expense rate maintained a downward trend. The expense rate in 2021 was 14.74%, the lowest level in recent years.
We will increase production capacity across the country and promote the implementation of the “double 10 billion” strategy. At present, the company has nine production and R & D bases throughout the country, including Dezhou, Jingmen, Chongqing and Weinan. Anhui Keshun technology and more than 10 satellite factories are under construction. In the next few years, the company will maintain the stable growth of production capacity and further optimize the layout by combining large production bases with small satellite factories, so as to lay the foundation for the “double 10 billion” strategy China State Construction Engineering Corporation Limited(601668) waterproof industry has a market capacity of more than 200 billion yuan, but the concentration is low. The market share of the company is less than 5%, and there is a large room for growth in the future.
Acquire Fengze shares and give play to synergy. The company has completed the layout of national production capacity in the field of real estate construction, but its operating revenue accounts for a relatively low proportion in the infrastructure construction market such as railway and highway. In the first quarter of 2022, the company completed the asset transfer of Fengze shares. Fengze shares has rich experience in projects in the field of transportation infrastructure. Through this acquisition, the company can play a synergistic effect: explore the infrastructure markets such as railway and highway, and expand the waterproof market share; It can also enter the damping market and optimize the product structure.
Profit forecast and investment rating. The company’s waterproof material production capacity expanded steadily. At the same time, the company completed the acquisition of Fengze shares, played a synergistic effect, and explored new business growth points, laying the foundation for the “double 10 billion” strategy. We predict that the company’s net profit attributable to the parent company from 2022 to 2024 will be 930 million yuan, 1341 million yuan and 1854 million yuan respectively, with corresponding EPS of 0.81 yuan, 1.16 yuan and 1.61 yuan respectively, and corresponding PE of 12.28x, 8.52x and 6.16x. It will be rated as “overweight” for the first time.
Risk warning: the market demand is less than expected; Rising prices of raw materials; Industry competition intensifies; Risk of recovery of accounts receivable; The epidemic has repeatedly affected the economy; Adverse changes have taken place in the macro environment.
