\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 37 Keshun Waterproof Technologies Co.Ltd(300737) )
Matters:
The company announced the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved a revenue of 7.77 billion yuan, a year-on-year increase of 24.6%, and the net profit attributable to the parent company was 670 million yuan, a year-on-year decrease of 24.5%, which was at the middle level of the performance forecast; In 2022q1, the revenue was 1.73 billion yuan, a year-on-year increase of 18.7%, and the net profit attributable to the parent company was 100 million yuan, a year-on-year decrease of 40.8%. In 2021, the company plans not to distribute cash dividends, bonus shares or increase share capital with capital reserve.
Ping An View:
The increase in cost and price superimposed the provision for bad debts, and the performance fell year-on-year. In 2021, the company's revenue increased by 24.6% on a year-on-year basis, and the net profit attributable to the parent company decreased by 24.5% on a year-on-year basis, mainly because: 1) the prices of upstream raw materials such as asphalt and lotion rose sharply, and the gross profit margin of sales in 2021 decreased by 8.4pct to 28.5% on a year-on-year basis; 2) Downstream real estate credit events occurred frequently, and the company accrued credit impairment of 250 million yuan. Affected by the continuous rise of raw material prices, the gross profit margin of 2022q1 company further decreased to 25.7%, down 6.4pct year-on-year, resulting in a year-on-year decrease of 40.8% in the net profit attributable to the parent company. Considering that the company actively increased the selling price of waterproof products in the first quarter, the subsequent gross profit margin is expected to improve.
The rapid growth of paint revenue has successfully cut into the earthquake mitigation and isolation market. In 2021, the sales volume of the company's waterproof industry was 460 million square meters, with a year-on-year increase of 29.5%, continuing a good growth; In 2021, the revenue of waterproof coiled materials was 4.55 billion yuan, with a year-on-year increase of 12.2%, and the gross profit margin was 32.7%, with a year-on-year decrease of 6.6pct; The revenue of waterproof coating was 1.68 billion yuan, with a year-on-year increase of 46.2%, and the gross profit margin was 22.1%, with a year-on-year decrease of 13.1pct; Waterproof works amounted to 1.53 billion yuan, with a year-on-year increase of 54.4% and a gross profit margin of 23.0%, a year-on-year decrease of 7.1pct. In 2021, the company issued shares to acquire Fengze shares, successfully passed the audit, entered the earthquake reduction and isolation industry, and released the "Keshun oasis" rainwater management system to further enrich the company's product series. In addition, the company adopted the sales strategy of "more people, more stores and more goods" in the field of civil building materials, continuously strengthened market promotion and improved channel network. The revenue growth rate in 2021 was as high as 62%.
Steady growth, risk control, and substantial inflow of operating cash in 2021q4. Faced with frequent thunderstorms and defaults in the downstream real estate industry in 2021h2, the company timely adjusted its strategy, emphasized steady growth and risk control, increased the recovery of accounts receivable, and paid more attention to operating cash flow. The net operating cash inflow in 2021q4 was 1.23 billion yuan, a year-on-year increase of 107%, and the net inflow in 2021 was 610 million yuan.
Investment suggestion: maintain the previous profit forecast. According to the latest equity calculation after the additional issuance of the company, the EPS is expected to be 1.00 yuan and 1.32 yuan respectively from 2022 to 2023, and the new forecast for 2024 is 1.56 yuan. The corresponding PE of the current stock price is 10.4 times, 7.9 times and 6.7 times respectively. As a waterproof leader, the company has both brand strength, product advantages and price raising ability. The subsequent profit margin is expected to improve, and the demand under epidemic prevention and control will also gradually improve; From the perspective of the industry, downstream real estate enterprises frequently default, accelerate the clearing of the waterproof industry pattern, and the leading enterprises benefit more. In the medium and long term, the general trend of waterproof standard raising is the trend, and the company has no worry about its future growth. In 2022, we will continue to promote the implementation of the "double ten billion" strategy. We are optimistic about the future development of the company and maintain the "recommended" rating.
Risk tips: 1) risk of price fluctuation of raw materials: raw materials required by the company for production mainly include asphalt, membranes (including isolation membrane), polyester matrix, SBS modifier, polyether, lotion, base oil, paraffin, isocyanate, etc., which are petrochemical products. If the purchase price of the above raw materials continues to rise, it will have a negative impact on the profitability of the company; 2) Risk of real estate demand falling short of expectations: the real estate industry is the main source of the company's sales revenue. If the subsequent development of the real estate industry falls short of expectations and new construction falls sharply, it will have an adverse impact on the company's performance growth; 3) Recovery risk of accounts receivable: if there is no significant improvement in the subsequent real estate financial environment and the financial situation of real estate enterprise customers served by the company deteriorates, the company's accounts receivable will not be recovered on schedule or will not be recovered, resulting in bad debts.
