\u3000\u3 Bohai Water Industry Co.Ltd(000605) 189 Wuhu Fuchun Dye And Weave Co.Ltd(605189) )
Event overview
In 2021, the company's revenue / net profit attributable to the parent company / net profit deducted from non attributable to the parent company were RMB 2.175233/226 billion respectively, with a year-on-year increase of 43.57% / 105.39% / 108.62%. The revenue was in line with the expectation and the net profit slightly exceeded the expectation. A cash dividend of 2 yuan will be distributed for every 10 shares. In 2022q1, the company's revenue / net profit attributable to the parent company / net profit deducted from non attributable to the parent company were RMB 474 million / 26 million / 33 million respectively, with a year-on-year increase of 44.02% / - 32.72% / - 13.64%. The performance was lower than expected. Our analysis was mainly due to: (1) the profit and loss on the disposal of non current assets caused by the demolition and reconstruction of the workshop was RMB -9.59 million, and the decrease in non deduction was mainly due to the high base contributed by the soaring cotton price last year.
Analysis and judgment:
In the 21st year, the volume and price rose simultaneously. 22q1 was affected by capacity utilization, but the price was stable. (1) In terms of products, the company's revenue from colored yarn / trade yarn / entrusted processing / other products in 2021 was 19.52/1.63/0.51/09 billion yuan respectively, with a year-on-year increase of 43% / 43% / 52% / 83%. (2) In terms of component price, the output / sales volume of colored yarn in 2021 was 66100 / 64800 tons, with a year-on-year increase of 17% / 20%, and the launch price increased by 24%. 22q1 although the price of cotton yarn decreased, the price of the company's products remained basically stable. Our analysis was mainly due to customers' concern that the price reduction would affect the delivery time and the improvement of the company's bargaining power; Due to the epidemic control, we estimate that the company's capacity utilization rate has decreased, estimated at about 60%.
The decline of gross profit margin in 22q1 was mainly due to the impact of the epidemic on capacity utilization. In 2021, the company's gross profit margin was 18.54%, with a year-on-year increase of 3.27pct, mainly due to the contribution of colored yarn price increase and inventory income under the background of rising cotton price; In 2021, the gross profit margin of the company's colored yarn / trade yarn / entrusted processing was 18.72% / 7.66% / 35% respectively, with a year-on-year increase of 3.26/3.49/1.81pct. The net interest rate in 2021 was 10.71%, with a year-on-year increase of 3.22pct. In 21 years, the company's sales / management / R & D / financial expenses were 0.5 / 2.15 / 3.22 / - 0.31% respectively, with a year-on-year increase of -0.19 / - 0.61 / - 0.73 / - 0.52pct. The gross profit margin of 2022q1 was 14.58%, an increase of -3.96pct compared with 18.54% at the beginning of the reporting period, and the sales / management / R & D / financial expense rate of 22q1 was 0.44% / 2.19% / 3.76% / - 0.34%, a year-on-year increase of -0.25 / - 0.57 / - 0.19 / - 0.55pct,
22q1 inventory further increased. 22q1 inventory was 465 million yuan, an increase of 11% month on month. We estimate that on the one hand, it is mainly due to the preparation of raw materials, but the inventory period is shortened. On the other hand, the company has reduced the proportion of foreign procurement and controlled the cost. The inventory turnover days were 72.22 days, a year-on-year decrease of 10.96 days. The company's accounts receivable was 26 million yuan, with a year-on-year increase of 52.36%, and the average turnover days of accounts receivable was 3.63 days, with a year-on-year decrease of 1.31 days.
Investment advice
According to our analysis, (1) in the short term, the downstream demand of the company is mainly FMCG, and the demand affected by the epidemic will only be delayed and will not be eliminated. Therefore, the orders are relatively guaranteed, and the epidemic will affect the short-term capacity utilization, but it is expected to rush the work through overtime in the later stage, and the gross profit rate is expected to recover from Q2. (2) In the medium term, the company's production capacity continues to expand rapidly: after the completion of the 30000 ton raised investment project, the total production capacity will reach 72000 tons, which will be completed and put into operation this year; The first workshop of the intelligent spinning project with a capacity of 20000 tons is planned to be put into operation around the National Day this year, and the second workshop is planned to be put into operation in the middle of next year; The fiber dyeing project is expected to be partially put into operation around the Spring Festival next year; Jingzhou production base plans to put the first workshop (20000 tons) into operation in December this year, and the second and third workshops are planned to be put into operation in May and October next year. (3) In the long run, the company continues to seize market share and expand downstream customers to towels, home textiles, dyed fabrics, etc. On February 16, the company announced the plan for public issuance of convertible bonds, raising no more than 570 million yuan, which was approved by the CSRC on April 22. Maintain the revenue forecast of 22 / 23 to be RMB 2.809/3.856 billion, increase the revenue forecast of 24 years to be RMB 5.077 billion, maintain the net profit forecast of 22 / 23 to be RMB 247 / 339 million, increase the net profit forecast of 24 years to be RMB 451 million, maintain the EPS forecast of 22 / 23 to be RMB 1.98/2.72, increase the EPS forecast of 24 years to be RMB 3.61, share price of 19.3 yuan on April 29, 2022, corresponding to PE of 10 / 7 / 5x respectively, and maintain the "buy" rating.
Risk tips
Price fluctuation risk of raw materials; Market competition risk; Natural disaster risk; Risk of policy change; The issuance of convertible bonds has not been completed, and there is uncertainty risk.
