\u3000\u3 China Vanke Co.Ltd(000002) 398 Lets Holdings Group Co.Ltd(002398) )
The annual revenue increased steadily and the profit side was under pressure. In 2021, the company achieved a revenue of 4.918 billion yuan, a year-on-year increase of + 27.05%, a net profit attributable to the parent company of 272 million yuan, a year-on-year increase of – 27.00%, a net profit attributable to the parent company after deduction of non-profit of 240 million yuan, a year-on-year increase of – 29.48%, an EPS of 0.38 yuan / share, and a proposed 10 dividend of 0.8 yuan (including tax), which is in line with the previous performance express. Under the poor market environment, the company actively seized the share and achieved a significant increase in the scale of revenue. Affected by the rising cost of raw materials, the profit side is under pressure. In 2022, Q1 company’s revenue was 883 million, with a year-on-year increase of – 0.92%, and the net profit attributable to the parent company was 55 million, with a year-on-year decrease of – 23.16%. The performance decline was mainly due to the restriction on the sales of concrete admixtures in some areas of the company due to epidemic control and the slight increase in some expenses.
The annual income of the two businesses increased simultaneously, and the profitability was restricted by the cost side. The company’s annual revenue from admixture and technical service testing business was 3.068 billion (+ 15.98%) and 512 million (+ 6.49%) respectively. The sales volume of admixture reached 1.66 million tons, a year-on-year increase of + 15.28%; The gross profit margin of the two businesses are 18.95% (- 4.12pct) and 31.31% (- 11.77pct) respectively, and the net profit margin is 5.18% (- 3.36pct) and 7.19% (- 12.9pct) respectively. The cost control was optimized. During the period, the cost rate reached 11.42%, with a year-on-year increase of -0.7pct, of which the sales / management / Finance / R & D cost rate reached 4.2% / 3.3% / 0.1% / 3.8%, with a year-on-year increase of -0.5pct / – 0.1pct / + 0.1pct / – 0.1pct. The increase in the financial cost rate was mainly due to the increase in borrowings in the current period and the recognition of lease interest expenses after the implementation of the new lease standards for the first time. The turnover rate of accounts receivable was 1.78 times, a slight decrease of 0.18 times year-on-year, and remained relatively stable as a whole.
Q1 performance was slightly under pressure and cash flow improved. In 2022q1, the gross profit margin of the company achieved 20.0%, year-on-year -0.2pct, and the net profit margin achieved 6.3%, year-on-year -1.9pct. During the period, the expense rate reached 12.8%, with a year-on-year increase of + 1.1pct, of which the sales / management / Finance / R & D expense rate changed by -0.04 / – 0.1 / + 0.5 / + 0.7pct respectively. The increase of financial expense rate was mainly due to the increase of borrowings and interest expenses in the current period. In terms of cash flow, the net cash flow from operating activities reached -02 million yuan, a year-on-year increase of + 97.7%, mainly due to the increase in cash received from the sale of goods and the provision of labor services during the reporting period. The asset liability ratio decreased by 0.84pct to 45.57% month on month.
Risk warning: business expansion is not as expected; The cost rise is higher than expected; The demand is less than expected.
Investment suggestions: actively layout, develop regional markets and maintain the “buy” rating.
The company is a leading enterprise in the quality inspection of China’s admixtures and construction projects in Fujian Province. This year, convertible bonds have been successfully issued. After raising funds to help the construction of production capacity, the company is expected to further increase the market share of admixtures in southwest and East China. At the same time, the company’s testing business will increase its support to local subsidiaries, increase the share of Chongqing, Hainan and Shanghai. While promoting and expanding the scale of existing testing business, Train new high value-added testing business. It is estimated that the EPS of 22-24 years is 0.52/0.62/0.70 yuan / share, and the corresponding PE is 12.1/10.1/8.9x, maintaining the “buy” rating.
