\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 058 Sailun Group Co.Ltd(601058) )
Event: on April 29, 2022 Beijing time, Sailun Group Co.Ltd(601058) released the first quarterly report of 2022. In the first quarter of 2022, the company achieved an operating revenue of 4.863 billion yuan, a year-on-year increase of 17.21%, and a net profit attributable to shareholders of listed companies of 322 million yuan, a year-on-year decrease of 19.57% and a month on month increase of 3.54%. At the end of the first quarter of 2022, the total assets were 27.521 billion yuan, an increase of 5.15% over the end of 2021, and the owner's equity attributable to shareholders of listed companies was 11.052 billion yuan, an increase of 2.99% over the end of 2021.
Comments:
22q1 continues to achieve month on month repair, and it is expected to return to the normal track of double growth after Q1. China's tire industry began to experience a sudden change in Q2 in 2021. China's demand declined. Although overseas demand was strong, shipping was suddenly tight, containers were difficult to find, and freight rates doubled. In addition, the company also encountered the impact of the blockade of the epidemic in Vietnam on the commencement and shipment of factories in Vietnam. In 2021, the industry and companies generally experienced a decline in profits. At the end of 2021, the impact of the epidemic in Vietnam subsided, and at the beginning of 2022, the epidemic in Vietnam ended, and the start-up of the company's Vietnam plant resumed rapidly. At the same time, the tension of shipping also showed a easing trend at the end of 22q1. The company achieved an operating profit of 354 million in 22q1, and achieved month on month growth for two consecutive quarters from the most difficult bottom in Q3 in 2021. The company's net profit attributable to the parent company in 22q1 was 322 million, which also achieved month on month growth for two consecutive quarters. In addition, the year-on-year decline of the company's net profit deducted from non parent company also narrowed for two consecutive quarters. In terms of revenue, the company also achieved the only quarter on quarter growth in the industry. Revenue growth means that the company is occupying more market share. After the difficulties on the cost side are weakened, the profitability is restored. In the next quarter and beyond, the company's performance is expected to achieve year-on-year and month on month growth and return to the normal growth track.
The sea freight is expected to return to normal in the second half of the year, and the sea freight pressure of the company will subside. In 2021, ship exports faced difficulties such as port congestion and container shortage, and sea freight rose sharply. The pressure of shipping in 2021 is reflected in the difficulty of obtaining transportation capacity and the rise of freight, which has a negative impact on the company's operation. We expect that the pressure on sea freight will begin to ease in the second half of 2022. On the one hand, we have observed that since 2022, the port congestion in the United States is easing at a speed faster than expected by the market, the shipping cycle between China and the United States is returning to normal, and the shortage of transportation capacity will be repaired. On the other hand, the performance expectations of shipping enterprises and shipping related indexes can also support our judgment. Maersk, the world's largest container shipping company, made a performance forecast for 2022 based on the assumption that the shipping business returned to normal in the second half of 2022. At the same time, it also lowered the growth prospect of global container demand from 2% - 4% to - 1% - 1%. In addition, the Baltic Sea Freight Index (FBX) has declined continuously since March 18, 2022, and fell to 8955 points on April 29, which is lower than the average of 9727 points in the second half of 2021. Therefore, we believe that the freight factor that has an important impact on the company's profits in 2021 will be significantly improved in 2022.
The pace of production expansion is accelerated, and it is expected to continue to expand its advantages. At present, the company has four factories in Qingdao, Dongying, Shenyang and Weifang. At present, the actual annual production capacity is 7.3 million all steel tires, 34.5 million semi steel tires and 50000 tons of off-road tires; There are two overseas production bases in Vietnam and Cambodia. At present, the actual annual production capacity is 4.25 million all steel tires, 12.5 million semi steel tires and 50000 tons of off-road tires. According to the company's production capacity planning, the company currently has production capacity under construction outside China, and the projects under construction in China are expected to reach production in 22 years. The annual production capacity will increase by 2.4 million all steel tires, 8.5 million semi steel tires and 10000 tons of off-road tires. Overseas Vietnam phase III (1 million all steel tires, 4 million half steel tires and 50000 tons of off-road tires) and Cambodia project (1.65 million all steel tires and 9 million half steel tires) are expected to be completed in 23 years. The Cambodian all steel tire project newly laid out by the company in March 2022 is located in the south of Cambodian Highway 1. There is no need to open the cabinet for inspection when passing through Vietnam. The company can make full use of the existing tire production technology and human and material resources, combined with the characteristics of Cambodia's own low tax rate, improve the company's international market share and help the company occupy a more favorable competitive position.
Liquid gold products have been highly recognized by the market and are continuously promoted. In November 2021, German t ü V Rhine released the real vehicle test results with a test cycle of one month and more than 10000 kilometers in the fourth China International Import Expo: the comprehensive fuel consumption of 100 kilometers of liquid gold tires is 18.26% lower than that of similar products with the best feedback from international first-line brands in China's heavy truck market, and 16.56% lower than that of similar products with the best feedback from Chinese first-line brands in China's heavy truck market, It is 11.24% lower than the main sales of similar products of Chinese first-line brands in the supporting market. In December, the company cooperated with Guangdong new energy vehicle development service center and Shenzhen Nanshan Transportation Co., Ltd. to carry out the Shenzhen green travel road test. Four new energy taxis were selected for this test. The test results showed that the power consumption of liquid gold tires per 100 kilometers was 12.26% lower than that of their original matching tires (corresponding to power saving of 2.04 degrees). The measured results of the company's liquid gold tire products, whether in all steel or semi steel, in fuel vehicles or in new energy vehicles, have been highly recognized by the market. In 2022, the company's liquid gold products are expected to further increase the market share and make some gains in overseas markets.
Profit forecast and investment rating: we expect the company's operating revenue to reach 23.631 billion yuan, 28.320 billion yuan and 33.838 billion yuan respectively from 2022 to 2024, with a year-on-year increase of 31.29%, 19.84% and 19.48%. The net profit attributable to the shareholders of the parent company is 1.898 billion yuan, 2.808 billion yuan and 3.988 billion yuan respectively, with a year-on-year increase of 44.54%, 47.95% and 42.04%. The diluted EPS from 2022 to 2024 will reach 0.62 yuan, 0.92 yuan and 1.30 yuan respectively. The corresponding PE in 2022 is 16 times, giving a "buy" rating. Risk factors: 1. The new production capacity is not put into operation as expected. 2. The risk of sharp fluctuations in rubber prices.
