\u3000\u3 China Vanke Co.Ltd(000002) 511 C&S Paper Co.Ltd(002511) )
Event 1: the company issued the 2021 annual report. In 2021, the company realized an operating revenue of 9.150 billion yuan, a year-on-year increase of 16.95%; The net profit attributable to the parent company was 581 million yuan, a year-on-year decrease of 35.85%; The non net profit deducted was 568 million yuan, a year-on-year decrease of 36.30%. In a single quarter, the company achieved an operating revenue of 2.875 billion yuan in 21q4, a year-on-year increase of 26.75%; The net profit attributable to the parent company was 97 million yuan, a year-on-year decrease of 58.72%; The non net profit deducted was 92 million yuan, a year-on-year decrease of 60.10%.
Event 2: the company released the first quarterly report of 2022. In 2022q1, the company achieved an operating revenue of 1.884 billion yuan, a year-on-year decrease of 10.36%, mainly due to the impact of epidemic disturbance and price increase; The net profit attributable to the parent company was 133 million yuan, a year-on-year decrease of 50.82%; Net profit deducted from non parent company was 127 million yuan, a year-on-year decrease of 52.50%.
In 2021, the profit was under pressure, and the gross profit margin of 22q1 was repaired month on month. 1) On the profit side, the company’s gross profit margin in 2021 was 35.92% (- 5.40pct.), The net interest rate attributable to the parent company is 6.35% (- 5.23pct.); 22q1 gross profit margin 32.81% (-7.64pct.); The net interest rate attributable to the parent company is 7.07% (-5.82pct.), The month on month ratio was + 3.71 PCT. 2) On the expense side, the company’s sales expense rate in 2021 was 21.71% (+ 1.97 PCT.), Mainly due to the increase in advertising expenses and employee salary expenses; The management fee rate is 3.73% (-0.94pct), which is mainly due to the decrease of equity incentive fee; The R & D expense rate is 2.32% (- 0.12pct.); The financial expense rate is -0.08% (+ 0.15pct.). The decline in the company’s profit margin is mainly due to the significant increase in the costs of pulp and energy, as well as the increase in market investment. Looking forward to 2022, with the marginal improvement of cost such as wood pulp, the optimization of category structure and accurate cost investment, the profitability is expected to stabilize and recover.
Household paper grew steadily, with a large number of new products for personal care and health. In 2021, the company’s household paper achieved a revenue of 8.658 billion yuan (+ 15.45%), with a gross profit margin of 36.99% (- 5.11 PCT.); The income of personal care products was 77 million yuan (- 23.03%), and the gross profit margin was 40.75% (- 22.45 PCT.); Other businesses realized a revenue of 415 million yuan (+ 85.4%), with a gross profit margin of 12.70% (+ 7.30 PCT.). The company actively improved the three major businesses of household paper, personal care and health products, complied with the needs of consumers, improved the product development system, and strengthened the high-end and young brand management. Among them, the sales proportion of high-end products such as oil painting, face and lotion increased, and household paper grew steadily; Affected by the high base of mask business last year, the apparent revenue of personal care business has slightly adjusted. Excluding mask products, the revenue of personal care has maintained double-digit growth. We expect that with the Company re combing its business and brand, strengthening the R & D layout of key categories, and the rapid volume of new high margin categories such as nursing products and health products, it is expected to create a second growth curve.
The market share has increased steadily, the cost side is expected to improve, and the basic management will be strengthened in 2022. 1) In terms of volume price split, the company sold 148 million boxes of household paper in 2021, with a year-on-year increase of 26.23%. The average box sales price was 58.7 yuan, with a year-on-year decrease of about 8.57%. The sales growth rate was beautiful, exceeding the level of peers, and the market share increased steadily. 2) On the cost side, pulp accounts for 40% – 60% of the company’s production cost. At the beginning of last year, the pulp price rose and fell back, and rose again at the end of the year due to the disturbance of the international supply chain. According to Zhuo Chuang data, the annual average price of coniferous pulp per ton in 2021 was 6305 yuan, up + 36% year-on-year compared with 2020, and the average price of 22q1 tons was 6547 yuan. The pulp price is still high. Looking forward to the future, the UPM strike in April has ended, the new capacity of international pulp mills is expected to be put into operation one after another, and the cost side pressure is expected to be relieved marginally. 3) In terms of production capacity, in order to comply with the trend of centralized production capacity of household paper, the 400000 ton high-grade household paper project of the company has been successfully promoted. The first phase has an annual output of about 100000 tons of high-grade household paper, and the construction period is 1.5 years. It is expected to be put into operation within the year. 4) In terms of management, the company aims to strengthen management based on 20222024, strengthen the construction of talent team and improve the organizational structure system. At present, the senior management team is adjusted in place and the core marketing backbone personnel are stable, which is expected to further stimulate the vitality of the organization.
Investment suggestion: the company focuses on the three scenarios of home care, personal care and travel care, and the three businesses and five channels go hand in hand, ranking the first echelon of household paper. We expect the company to achieve revenue of 10.06 billion yuan, 11.34 billion yuan and 12.67 billion yuan from 2022 to 2024, an increase of 9.9%, 12.7% and 11.7% at the same time, and a net profit attributable to the parent company of 710 million yuan, 864 million yuan and 1027 million yuan (the cost of bulk raw materials is high, the profit forecast is lowered, and the previous forecast value from 2022 to 2023 is 1.454 billion yuan and 1.696 billion yuan), an increase of 22.2%, 21.7% and 18.8% at the same time, with EPS of 0.54, 0.66 and 0.78 yuan, maintaining the “buy” rating.
Risk tips: the risk of intensified industry competition, the risk of raw material cost fluctuation, and the risk of channel expansion less than expected
