\u3000\u3 Shengda Resources Co.Ltd(000603) 378 Asia Cuanon Technology (Shanghai) Co.Ltd(603378) )
Event: the company released 21fy and 22q1 financial reports. 21fy achieved a revenue of 4.72 billion yuan, yoy + 34.5%, and realized a net profit attributable to the parent of – 540 million yuan, 320 million yuan in the same period last year, deducting a net profit not attributable to the parent of – 650 million yuan, 280 million yuan in the same period last year, which was at the lower limit of the previous performance forecast. 22q1 realized income / net profit attributable to the parent company / net profit attributable to the parent company after deducting non-profit of RMB 4.9 / – 0.4 / – 0.5 billion, which was -1.1 / – 0.3 / – 0.2 billion respectively compared with 21q1.
The production and marketing of architectural coatings are booming, the volume and price of thermal insulation materials are rising, and the expansion of production capacity contributes to the increase of market share
21fy company achieved 2.36/230 billion yuan of Engineering / home decoration coating revenue, yoy + 24.9% / + 63.5%, and sales volume yoy + 32.9% / + 94.7%. The revenue of thermal insulation materials increased by 54.7%, that of thermal insulation decorative panels by 430 million, yoy + 8.0%, and that of waterproof materials by 210 million yuan, yoy + 458%. The unit price of thermal insulation material / decoration board is – 1% / + 0.16% / + 0.6% year on year, respectively. From the perspective of sales channels, 21fy’s distribution revenue increased by 66%, accounting for 84%; The number of dealers at the end of 21fy was 17600, an increase of 110% over the end of 20. In terms of production capacity, the company’s new factories under construction include Chongqing, Shijiazhuang and Guangzhou. With the optimization of production capacity layout, the company’s market share is expected to continue to increase, and multi category expansion is also expected to contribute additional increment. At the same time, as the proportion of outsourced products decreases, the profitability of the company can be expected to increase.
The cost rise led to pressure on the gross profit margin, and the product price was successfully raised. The gross profit margin of 22q1 rebounded rapidly
The overall gross profit margin of 21fy was 24%, down 8.5pct year-on-year. Among them, the gross profit margin of coatings / building energy-saving materials / waterproof materials decreased by 11.5, 2.2 and 8.2pct respectively. In addition to the decrease in the price of main coatings, the sharp rise in the price of raw materials had a great impact on the gross profit margin, of which the purchase unit prices of lotion and titanium dioxide were yoy+45% and 38%. Waterproof, new retail and other businesses are in the initial stage, which is a drag on profits. The self owned capacity of waterproof business has not been put into operation, and the gross profit margin is 9.2%. There is a large room for optimization in the future.
22q1 gross profit margin was 32.8%, with a year-on-year increase of + 4pct and a month on month increase of + 14pct. With the implementation of the price increase of the company’s products (the price of coatings and thermal insulation decorative panels increased by 1% – 5% month on month) and the decline of some raw materials, the company’s gross profit margin recovered rapidly. During 21fy, the expense rate was 23.4%, with a year-on-year increase of 4.4pct, of which the sales / management / R & D / financial expense rate was + 2.6 / + 1.1 / – 0.25 / + 0.91pct respectively year-on-year. The increase in the sales and management expense rate was mainly due to the increase of 21fy company’s personnel and the share based payment expense of 29.83 million (1.84 million in the same period last year). The net profit margin attributable to the parent company of 21fy was – 11.5%, down 20.5pct year-on-year.
The net outflow of 21fy CFO was 1.03 billion yuan, an increase of 1.28 billion yuan year-on-year, of which the cash payment ratio increased by 28 PCT and the cash receipt ratio increased by 11 PCT. We believe that the industry is in a difficult time due to the decline of tourism boom since 21q3 and the high price of raw materials. However, from the operating data of 22q1, the prices of some auxiliary materials have dropped from the high level month on month. We are optimistic about the recovery of profitability and cash flow of the company in 22 years.
Investment suggestion: we believe that the company has made great efforts in channel reform and risk prevention and control, and still has a good medium and long-term growth foundation after going through a difficult period. The profit side is expected to show high elasticity in 2022. We expect the performance of 22-24 years to be RMB 330 / 570 / 800 million (the previous value was RMB 483 / 730 million in 22-23 years), corresponding to pe12 / 7 / 5 times. The company’s valuation is at a historical low and maintains the “buy” rating.
Risk tips: raw material prices rose more than expected, production capacity was less than expected, and industry competition intensified
