\u3000\u3 China Vanke Co.Ltd(000002) 081 Suzhou Gold Mantis Construction Decoration Co.Ltd(002081) )
Impairment provision dragged down the company's performance and maintained the "buy" rating
The company released the annual report for 21 years and the first quarterly report for 22 years. In 21 years, the company achieved a revenue of 25.37 billion yuan, a year-on-year increase of - 18.8%, a net profit attributable to the parent of - 4.95 billion yuan, a year-on-year increase of - 308.5%, a deduction of non net profit of - 317.4%, an operating revenue of 5.85 billion yuan, a year-on-year increase of + 3.0%, a net profit attributable to the parent of 500 million yuan, a year-on-year increase of + 5.4%, and a deduction of non net profit of 350 million yuan, a year-on-year increase of - 22.5. In the past 21 years, the company made more impairment provision for Evergrande's risk exposure, which dragged down the company's performance. We believe that with the accelerated clearing of real estate capital chain risk and the continuous optimization of the company's business structure, the performance in the past 22 years is expected to improve and maintain the "buy" rating. The continuation of traditional business is under pressure, and there is still room for improvement in gross profit margin
Quarter by quarter, the revenue of 21q1-4 in a single quarter was 56.8% / - 79.9% / - 61.3% / - 5.57 billion yuan respectively, with a year-on-year increase of + 31.4% / - 10.1% / - 30.8% / - 39.3% respectively. The net profit attributable to the parent company was 4.7 / 6.0 / 3.4 / - 6.36 billion yuan, with a year-on-year increase of + 41.3% / - 10.8% / - 52.6% / - 1062.7%. The annual revenue growth was high before and low after. There were large losses in the fourth quarter, which dragged down the annual performance. In terms of business, the company's decoration / curtain wall / design business achieved revenue of 22.48/11.9/1.5 billion yuan in 21 years, with a year-on-year revenue of - 19.5% / - 27.3% / + 0.2%, and a gross profit margin of 14.3% / 2.4% / 47.9%, with a year-on-year revenue of - 1.2 / - 7.2 / + 9.7pct. We believe that the company's reduction in real estate orders is expected to gradually pick up the subsequent gross profit margin.
The cost control level is good, and the cash flow is under pressure
The gross profit margin of the company in 21 years was 16.1%, with a year-on-year rate of -0.5pct and a period expense rate of 7.0%, with a year-on-year rate of + 0.4pct, of which the sales / management / R & D / financial expense rates were 1.3% / 2.1% / 3.3% / 0.3% and + 0.1 / + 0.1 / + 0.2 / - 0.1pct respectively, and the overall expense control level was good. In 21 years, the company's assets and credit impairment losses totaled 7.69 billion yuan, a significant increase of 7.31 billion yuan year-on-year. Due to the large debt risk exposure of Evergrande in 21 years, the company accrued various impairment losses on Evergrande's receivables amounted to 6.1 billion yuan, which seriously dragged down the performance. After excluding Evergrande's impairment provision, the company's net profit was about 1.15 billion yuan. Under the comprehensive influence, the net interest rate attributable to the parent company in 21 years was - 19.5%, with a year-on-year increase of - 27.1pct. In 21 years, the net CFO of the company was 810 million yuan, a year-on-year increase of - 960 million yuan, the cash to cash ratio was 107.8%, a year-on-year increase of + 15.7%, the cash to cash ratio was 103.3%, a year-on-year increase of + 18.7%, and the asset liability ratio was 69.9%, a year-on-year increase of + 8pct. There is still room for improvement in the overall asset structure. The undervalued value highlights the value attribute, is optimistic about the follow-up business structure transformation, and maintains the "buy" rating
The company strengthened risk control management and prudently undertook real estate related businesses. In the past 21 years, the contract output value of residential projects decreased by 57% year-on-year, and made more impairment provisions for Evergrande to clear the relevant risks to the greatest extent. In addition, the company paid more attention to the cash flow of key projects and public projects, with a year-on-year increase of 52%. With the accelerated clearing of real estate risks, we believe that the company is expected to continue to optimize its business structure, continue to develop new business types such as new infrastructure, new energy, artificial intelligence and medical care, accelerate the development of specialized sector markets such as hospitals, hotels and schools, and realize light loading in 22 years. It is estimated that the net profit attributable to the parent company in 22-24 years will be RMB 2.19/24.9/2.87 billion (the value was RMB 2.25/2 billion in 22-23 years ago). With reference to the valuation of comparable companies, Give 8 times PE for 22 years, corresponding to the target price of 6.6 yuan (the previous value was 6.93 yuan), and maintain the "buy" rating.
Risk warning: the adjustment of business structure is less than expected, the execution of on-hand orders is less than expected, the prosperity of the industry continues to decline, and there is a risk of asset and credit impairment in the future.
