\u3000\u3 Shengda Resources Co.Ltd(000603) 737 Skshu Paint Co.Ltd(603737) )
The net profit attributable to the parent company in 21 years lost 417 million yuan, and the provision for impairment affected the performance
In 21 years, the company achieved revenue of 11.43 billion yuan, a year-on-year increase of 39.4%, net profit loss attributable to parent company of 417 million yuan, net profit loss not attributable to parent company of 562 million yuan deducted, of which Q4 achieved revenue of 3.52 billion yuan in a single quarter, a year-on-year increase of 9.93%, net profit attributable to parent company / net profit deducted from non attributable to parent company of – 480 / – 500 million yuan respectively, mainly due to credit impairment loss of 810 million yuan accrued in the current period and sharp rise of raw materials; At the same time, the company released the first quarterly report of 22 years. In 22q1, the revenue was 1.7 billion yuan, a year-on-year increase of + 14.5%, the net profit attributable to the parent was – 40 million yuan, and the net profit not attributable to the parent was – 100 million yuan. The non recurring income was mainly 62.23 million yuan of government subsidies.
The retail end grew strongly and the channel layout continued to deepen
In 21 years, the income of home decoration wall paint / engineering wall paint was 2.17/4.67 billion yuan, with a year-on-year increase of + 103% / 29%, and the sales volume was 335 / 1078000 tons, with a year-on-year increase of + 98% / 37%. The company continued to expand new channels. In 21 years, 9850 small B customers were added, reaching about 14848. It is estimated that the price of home decoration / Engineering paint is 6480 / 4330 yuan / ton, with a year-on-year increase of + 2.2% / – 5.9%. In 21 years, the revenue of waterproof coiled material / coating was 1.27/490 billion yuan respectively, with a year-on-year increase of 37% / 123% respectively, which is due to the company’s increasing market development. The revenue of 22q1 home decoration paint / Engineering paint / waterproof coiled material was + 80% / + 6% / – 13% respectively year-on-year, mainly driven by the growth of sales volume. The selling prices of home decoration paint / Engineering paint were – 4.9% / – 1.3% year-on-year and – 12% / + 0.2% month on month in 21q4, mainly due to the change of product structure.
The expense rate of 21 years has been optimized, and the cash flow is still stable
The overall gross profit margin of the company in 21 years was 26.1%, a year-on-year decrease of 7.7pct, of which the gross profit margin of home decoration paint / Engineering paint / waterproof coiled material was -8.0/-15.4/-7.6pct respectively, which was mainly affected by the rise in the price of raw materials. The average purchase price of lotion / titanium dioxide / resin / solvent / asphalt and other raw materials of the company increased by 43%/47%/43%/65%/20% respectively year-on-year; The company’s overall gross profit margin in 22q1 was 26.3%, basically unchanged year-on-year, with a slight increase of 0.4pct month on month (MOM) compared with 21q4. During the 21-year period, the cost rate was 24.2%, with a year-on-year decrease of 0.9pct, of which the sales / management / R & D cost rate was – 0.4 / – 0.4 / – 0.1pct respectively year-on-year. The scale effect appeared and the cost side began to be optimized. In the future, with the improvement of per capita efficiency, the cost is expected to continue to be diluted. In the past 21 years, the company’s net operating cash flow inflow was 480 million yuan, with a year-on-year increase of 5.95%, cash to cash ratio of 98% / 90%, year-on-year + 3 / + 4pct, and the cash flow was still stable.
22. Young people are ready to fight, and the landing of fixed increase is expected to alleviate the pressure of the company’s debt
In recent years, the company continues to promote the sinking of small channel B, the project revenue is expected to maintain steady growth, and the demand of end C is gradually released. The company’s home decoration paint revenue shows a rapid growth trend, and its proportion in the overall revenue is expected to further increase in the future. After the company gets rid of the burden of impairment in 21 years, it will be light in 22 years. After the successful implementation of fixed growth in the future, it is expected to solve the problem of growth constraints of the company. Considering that the scale effect plays a leading role in the decline of expense rate and the improvement of gross profit margin, the forecast of net profit attributable to parent company in 22-23 years is raised to RMB 1.191/1.508 billion (the previous value is RMB 1.10/1.36 billion), and the forecast of net profit attributable to parent company in 24 years is increased to RMB 1.874 billion. Referring to comparable companies and considering the better growth of the company, the company is given a valuation of 2.5 times PS in 22 years, corresponding to 31.4 times of target PE in 22 years, and the target price is RMB 99.40 (the previous value is RMB 149.50), maintaining the “buy” rating.
Risk tip: the price rise of raw materials is higher than expected, the demand of the industry is declining, and the implementation progress of fixed increase is lower than expected.
