\u3000\u3 China Vanke Co.Ltd(000002) 398 Lets Holdings Group Co.Ltd(002398) )
Event: the company released the 2021 annual report and the first quarterly report of 2022. In 21 years, the company’s revenue was 4.918 billion yuan, a year-on-year increase of + 27.05%; The net profit attributable to the parent company was 272 million yuan, a year-on-year increase of – 27.00%. 22q1 achieved a revenue of 883 million yuan, a year-on-year increase of – 0.92%, and a net profit attributable to the parent company of 55.46 million yuan, a year-on-year increase of – 23.16%.
The market share of admixtures continued to increase, and the income growth slowed down due to the real estate boom. The revenue growth of 21q1-q4 was 96.54% / 31.04% / 21.53% / 4.10% respectively. The delivery rhythm of Q3 and Q4 slowed down due to the downturn of the real estate boom. In 2022, Q1 operating revenue decreased by 0.92% year-on-year, mainly due to the great impact of the epidemic in some areas of Q1, which affected the company’s delivery. In 2021, the revenue of admixture business increased by 15.97% year-on-year, the sales volume of admixture was 1.66 million tons, a year-on-year increase of 15.28%, and the unit price was 1848 yuan / ton, a year-on-year increase of 0.6%. The market share of the admixture business company reached 9.5% in 2021, an increase of 1 percentage point over the same period in 2020. The technical service business increased by 6.56% year-on-year.
The rising cost of raw materials dragged down the performance, and the gross profit margin has improved quarter by quarter since the price increase in Q3. Quarterly, the gross profit margin of Q1-Q4 sales changed by -8.29 / – 6.62 / – 5.91 / – 4.37pct respectively year-on-year, and the year-on-year decline of gross profit margin narrowed quarter by quarter, mainly due to the company’s price increase on the downstream since 21q3, and the gross profit margin was gradually repaired. The gross profit margin of 2022q1 sales was 20.01%, up 2.09 percentage points month on month. The net profit margin of 2021q1-q4 sales is 8.29% / 5.79% / 6.49% / 2.74% respectively. Q4 net interest rate decreased by 4.21 percentage points year-on-year, mainly due to the corporate income tax rate of 25.90% in 21q4 and 6.8% in the same period of 20 years. In 2022, the net profit margin of Q1 sales was 6.35%, a year-on-year decrease of 1.94 percentage points, mainly due to the increase of expense rate during the period.
The operating cash flow remained stable and improved year-on-year in 22q1. The net cash flow from operating activities of the company in 2021 was RMB 322 million, which was basically the same as that in the same period in 2020. 1) Cash to cash ratio: in 2021, the company’s cash to cash ratio was 81.58%, with a year-on-year change of + 1.89 PCT. At the end of 2021, the balance of accounts and notes receivable of the company was 3.571 billion yuan, 2.92 billion yuan in the same period last year, with a year-on-year increase of 22.30%; 2) During the period, the cash payment ratio of the company was 72.03%, with a year-on-year change of + 1.16pct. The company’s net cash flow from operating activities in Q1 in 2022 was – 2.49 million yuan, a year-on-year increase of 97.74%.
Profit forecast and investment rating: the admixture business has benefited from the improvement of customer concentration and the accelerated exit of small enterprises. The share of the company has increased and the sales volume has increased rapidly. At the same time, the added value brought by the attribute of technical services has gradually appeared; The “cross regional and cross domain” strategy of the testing business has promoted the extension M & A, accelerated the implementation, improved the performance, and further enhanced the strength of building comprehensive technical services. The subsequent regional expansion is worth looking forward to. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 430 / 574 / 736 million yuan respectively, and the corresponding PE will be 10x / 8x / 6x respectively. Considering the company’s cross regional and cross domain expansion potential, it was covered for the first time and was rated as “overweight”.
Risk tips: downstream infrastructure and real estate industry fluctuation risk, raw material price fluctuation risk, industry competition risk, accounts receivable risk, etc.
