\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 390 China Railway Group Limited(601390) )
Q1 performance exceeded expectations, and the ultra-high base went up again. In 2022q1, the company realized an operating revenue of 266.5 billion yuan, an increase of 12.8% at the same time; The net profit attributable to the parent company was 7.59 billion yuan, an increase of 17.0% at the same time. On the basis of the high growth in the same period last year (performance yoy + 81% in 21q1, up to 30% relative to the two-year compound growth rate in 19q1), it still achieved rapid growth, exceeding expectations. The growth rate of performance is slightly higher than that of income, which is mainly driven by the downward trend of expense rate. In terms of business, the revenue of the infrastructure sector was 230.9 billion yuan, an increase of 11.3% at the same time. Under the repeated Q1 epidemic, the company steadily promoted the production and operation plan, and the construction revenue increased steadily, demonstrating the leading business toughness. Survey and design / equipment manufacturing / real estate development / other businesses achieved revenue of RMB 4.9 billion / 65 billion / 89 billion / 16 billion respectively, an increase of 12.1% / 1.9% / 71.7% / 16.7% at the same time.
The gross profit margin decreased slightly and the expense rate was well controlled. The gross profit margin of the company in 2022q1 was 9.2%, a decrease of 0.50 PCT over the same period of last year. By business, the gross profit margin of infrastructure construction / survey and design / equipment manufacturing / real estate development / other businesses changed by -0.27 / + 1.47 / – 0.86 / – 10.37 / – 2.40 PCT year-on-year respectively. The decline of gross profit margin of construction business is still expected to be affected by the price fluctuation of raw materials and engineering epidemic prevention expenses. During the period, the expense rate was 4.85%, a decrease of 0.49 PCT over the same period of the previous year, of which the sales / management / R & D / financial expense rate changed by + 0.01 / – 0.25 / + 0.05 / – 0.30 PCT respectively. The decrease in the administrative expense rate was mainly due to the company’s strengthening of non productive expenditure control and the improvement of operating efficiency; The decrease of financial expense rate is mainly due to the large increase of investment and financing income of infrastructure investment projects as interest income in the current period. The net interest rate attributable to the parent company was 2.84%, with a year-on-year increase of 0.10 PCT. The net outflow of operating cash flow of 2022q1 company was 49.4 billion yuan, an increase of 19.6 billion yuan compared with the same period last year, mainly due to: 1) due to the shortage of funds of some owners, the payment collection of the project lags behind; 2) In order to lock the material cost of the project in advance, the company has increased the reserve of raw materials, and the procurement expenditure has increased.
Q1 orders increased by 84% with a strong trend, achieving steady growth and making a good start. The company announced that the newly signed orders in Q1 were 605.7 billion yuan, a year-on-year increase of 84.0%, and the growth rate reached a single quarter high since 2014. The main reasons are as follows: 1) with the steady growth policy, the company has actively grasped the opportunities and strengthened market development. 2) The base was low in the same period last year (21q1 orders fell 2.5% year-on-year). In terms of business, the newly signed orders of infrastructure business were 543.5 billion yuan, a significant increase of 94% year-on-year, of which railway / highway / municipal and other orders were 569 / 849 / 401.7 billion yuan, an increase of 7.9% / 147.5% / 108.1% respectively. The orders for highways and municipal services have made significant efforts, and the high growth of municipal orders is mainly driven by the growth of orders such as industrial parks and urban renewal. Among non contracting businesses, survey and design / industrial equipment / real estate development / others were newly signed with RMB 119 / 149 / 72 / 28.3 billion respectively, yoy + 157.5% / + 5.4% / – 28.4% / + 38.4%. The high growth of design business is expected to be mainly due to the acceleration of the preliminary work of infrastructure projects in the first quarter; The decline in real estate orders is expected to be mainly affected by the overall environment of the industry. By region, the newly signed contract amount of domestic business was 566.2 billion yuan, a year-on-year increase of 81.7%; The newly signed contract amount of overseas business was 39.6 billion yuan, a year-on-year increase of 123.6%, and overseas operations continued to be repaired. By the end of 2022q1, the outstanding contract amount of the company had reached 4896.3 billion yuan, which was 4.6 times of the revenue in 2021. There were sufficient orders on hand to ensure sustained and steady growth in the future.
Investment suggestion: we estimate that the net profit attributable to the parent company of the company in 22-24 years will be RMB 311 / 349 / 39.2 billion respectively, with an increase of 13% / 12% / 12% respectively, and EPS of RMB 1.26/1.41/1.58 respectively. At present, the corresponding PE of the stock price is 5.6/5.0/4.5 times respectively, and Pb (LF) is 0.76 times at present. The steady growth is expected to promote the revision of the valuation and maintain the “buy” rating.
Risk warning: steady growth fails to meet expectations, profit of mineral resources business fails to meet expectations, repeated epidemic risk, increase in real estate impairment provision, and project progress fails to meet expectations
