\u3000\u30 Fawer Automotive Parts Limited Company(000030) 12 Guangdong Dongpeng Holdings Co.Ltd(003012) )
Guangdong Dongpeng Holdings Co.Ltd(003012) 2021 and the first quarter of 2022 achieved operating revenue of 7.979 billion yuan and 966 million yuan, with a year-on-year increase of 11.46% and a decrease of 14.73% respectively. The net profit attributable to shareholders of the parent company was 154 million yuan and -77 million yuan, with a year-on-year decrease of 81.97% and 248.23%, and the earnings per share was 0.13 yuan and -0.06 yuan.
Comments:
The risk control of direct selling business and the rise in the price of raw materials led to the decline of revenue and profit. As the main leader of ceramic tiles, the operating revenue of the company maintained a good growth rate of 17.22% in the first half of 2021. However, in the second half of 2021, some customers of downstream real estate companies with direct selling business had a debt crisis due to policy regulation. In order to prevent risks, the company takes a cautious attitude towards the direct selling business and comprehensively controls the risks of the direct selling business. Due to the impact of risk prevention and varying degrees of shutdown of some bases in Shanghai and Shenzhen due to the epidemic in the first quarter of 2022, the operating revenue of the company in the third quarter of 2021, the fourth quarter of 2021 and the first quarter of 2022 increased negatively year-on-year, decreasing by 2.22%, 6.24% and 14.73% respectively. At the same time, in 2021, the company made an impairment provision of 772 million for the accounts receivable of a real estate direct selling customer. Coupled with the rise in the price of raw materials and fuels and the delay in the transmission cost to the downstream, the net profit attributable to the shareholders of the parent company decreased by 81.79% and 248.23% in the first quarter of 2021 and 2022 (including the decline in the first quarter of 2022 and the problem of high base in the same period last year).
Strengthen the advantages of distribution channels and improve the ability to resist risks. One of the company’s biggest competitive advantages is the full coverage distribution network cultivated for many years. The distribution channels of ceramic tiles and sanitary products have covered most provinces and most provincial, prefecture and municipal cities. In order to guard against the risks brought by the debt crisis of real estate enterprises, the company strictly screened direct selling customers, contracted direct selling business, and empowered dealers, retail and small, medium and micro engineering. In 2021, the sales revenue of distribution channels accounted for 58.97%, with a year-on-year increase of 2.18 percentage points, and the operating revenue of distribution channels increased by 15.8% year-on-year; In the first quarter of 2022, under the influence of the epidemic, the operating revenue of distribution channels still maintained a growth of 4%. Distribution channels enhance the company’s anti risk ability during the risk period of the real estate industry. When the cash flow of the distribution network is good, the monetary capital of the company has always maintained a high level. Since 2015, the asset proportion of monetary funds has always remained at about 20%, and the asset liability ratio of the company has remained at about 40%. It was 21.65% in the first quarter of 2022, providing sufficient cash support for the company’s faster development and ensuring the company’s sustained endogenous growth.
Earnings forecast and investment rating: we estimate that the company’s earnings per share from 2022 to 2024 will be 0.81 yuan, 1.08 yuan and 1.25 yuan, and the corresponding dynamic PE will be 10 times, 8 times and 7 times. Considering the advantages of the company’s fully covered distribution channels, we will improve the company’s anti risk ability and growth sustainability, and maintain the company’s “strongly recommended” investment rating.
Risk tip: the loosening of real estate policy is less than expected.
