\u3000\u3 China Vanke Co.Ltd(000002) 203 Zhejiang Hailiang Co.Ltd(002203) )
Event: the company released the annual report of 2021 and the first quarterly report of 2022: the revenue in 2021 was 63.4 billion yuan, a year-on-year increase of 36%, and the profit attributable to the parent company was 1.1 billion yuan, a year-on-year increase of 63%. In 2022q1, the revenue was 18.6 billion yuan, a year-on-year increase of 19.1%, and the profit attributable to the parent company was 310 million yuan, a year-on-year increase of 15.07%.
Comments:
Steady profit growth: in 2021, the company achieved a revenue of 63.4 billion yuan, a year-on-year increase of 36%, and achieved positive growth for three consecutive years. Since 2021q4, affected by the epidemic and short-term power restriction, although the profit growth rate is lower than that of 2021q1-q3, it still maintains high-speed growth on the whole. In 2022q1, the net profit not attributable to the parent company was RMB 231 million, with a year-on-year increase of 28.69%. Under the influence of this round of Shanghai epidemic, the company's performance still improved steadily.
Copper pipe processing: downstream demand picks up and overseas business volume and price rise simultaneously: in 2021, the company achieved overseas sales of 393800 tons, a year-on-year increase of 5.72%; The gross profit of overseas single ton sales was 3371 yuan / ton, with a year-on-year increase of 39.30%. The simultaneous rise of volume and price has driven the performance growth and profitability of overseas business. In 2021, after the company completed the merger and acquisition of all copper alloy rods and copper tubes under KME, the sales volume of copper processing materials in the company's European factories increased by 14.58% compared with the same period last year, and turned losses into profits. After the recession in 2020, the global economy bottomed out and rebounded. In 2021, the real growth of global GDP was 6.1%. In 2021, China's comprehensive output of copper processed materials was 19.9 million tons, a year-on-year increase of 4.9%.
Copper foil business: capacity release is imminent. As the preferred material for negative current collector of power battery, lithium battery copper foil will fully benefit from the release of industry dividends and become one of the fastest growing sub industries in copper processing materials. In 2021, the shipment of electrolytic copper foil in China reached 656000 tons, with a year-on-year increase of 49.1%; Among them, the shipment of lithium copper foil reached 280500 tons, a year-on-year increase of 124.4%. The construction of high-performance copper foil project of the company has completed all pile foundation works and equipment procurement of phase I 50000 ton project so far. It is expected that the production line will be put into operation in mid-2022 and 25000 tons of lithium battery copper foil capacity will be formed by the end of 2022. In addition, the company will upgrade the copper pipe production line in batches before the end of 2024. At that time, the company's precision copper pipe production capacity will increase from 798000 tons to 1.31 million tons.
Profit forecast and investment rating: we expect the company's revenue to be 87.5/14/18.2 billion yuan from 2022 to 2024, with a year-on-year growth rate of 38% / 60% / 30% respectively. Based on the company's 2022q1 performance, we adjust the company's net profit attributable to the parent from 2022 to 2023 from 2 / 2.7 billion yuan to 1.5/2.2 billion yuan, that is, the company's net profit attributable to the parent from 2022 to 2024 is 1.5/22/27 billion yuan, with a year-on-year growth rate of 36% / 47% / 22% respectively; The corresponding PE is 11.9/8.1/6.6x respectively. Considering the stable growth of the demand of the copper pipe industry where the company is located and the leading position of the company in technological innovation, the "buy" rating is maintained.
Risk warning: the demand of downstream air conditioning and other industries is lower than expected; The production expansion progress is less than expected.
