\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 86 Beijing New Building Materials Public Limited Company(000786) )
Key investment points
Event: the company released the first quarterly report of 2022. The operating revenue was 4.61 billion yuan, a year-on-year increase of 10.47%, the net profit attributable to the parent was 560 million yuan, a year-on-year increase of 7.28%, and the non net profit deducted was 540 million yuan, a year-on-year increase of 4.59%. The company’s performance is in line with expectations.
The strong pricing power of gypsum board continues to show, and the performance of price increase escort is stable. Although the real estate end of 22q1 has been favorable due to the relaxation of urban construction policies, it has not yet stepped out of the downward trend. The completed area of houses from January to March has accumulated – 11.5% year-on-year, a sharp decline compared with the growth rate of 11.2% in 2021. The company has accounted for about 68% of the gypsum board market, and the sales of gypsum board are highly related to the completion of houses. It is judged that the sales volume of gypsum board 22q1 has slightly declined compared with the same period. Under this environment, it can still achieve 10.47% revenue growth. It is judged that it is mainly contributed by the price increase of gypsum board, which is mainly composed of two aspects. On the one hand, the company has strong pricing power, and the price increase leads to the rise of raw fuels such as coal and face paper. On the other hand, Taishan has launched the high-end strategy in the 21st year, 22q1 strategy continues to be effective and has made a great contribution to price improvement. On the whole, we judge that the company’s gypsum board volume decreased and the price increased, and the single average gross profit increased slightly, which promoted the steady increase of the single digit of the company’s 22q1 performance.
Acquisition of Yuanda Hongyu, a leading waterproof enterprise in North China, and layout of waterproof “wing” to the next city. Adhering to the idea of joint reorganization, as the only central enterprise waterproof enterprise in the industry at present, the waterproof “wing” company continues to incorporate high-quality private waterproof enterprises into its own business sector by taking advantage of the platform. Through this merger and acquisition, the company will control 70% of the shares of Tangshan Yuanda Hongyu and Suzhou Yuanda Hongyu. The income of Tangshan Yuanda Hongyu in the first five months of 20 and 21 years was 890 million yuan and 340 million yuan respectively, the net profit attributable to the parent was 160 million yuan and 50.94 million yuan, and the gross profit margin was 40.6% and 38.1%, The net interest rate is 17.7% and 14.9%. Suzhou Yuanda Hongyu is the main operator of the new production capacity base. It was put into operation in July 2021 and has not produced complete annual data. As a leading waterproof enterprise in North China, Yuanda Hongyu ranks the top two in Beijing and North China, including Beijing. For two consecutive years, it was shortlisted in the list of preferred waterproof enterprises of TOP500 real estate enterprises in the 10th and 9th places respectively. The addition of Yuanda Hongyu will complement the company’s channel and capacity layout in North China. After entering the industry in 2019 and becoming the top three in the industry in three years, the merger of Yuanda Hongyu will once again consolidate the company’s market position in the waterproof industry.
Under the downturn of real estate and the sharp rise in the price of raw materials, cash flow was temporarily under pressure. The company’s net operating cash flow of 22q1 was – 412 million, a significant decrease compared with the same period last year. On the one hand, the downstream real estate financing Q1 has not been significantly alleviated, and the pressure on the cash flow of the industrial chain has dragged down the collection of the company’s goods sold out. The Q1 cash receipt ratio was 77.92%, a significant decrease of 16.6pcts compared with the same period last year. On the other hand, under the sharp rise in the price of raw materials, the cash paid by the company for purchasing goods and receiving labor services increased by 177 million compared with the same period last year. With the continuous introduction of the real estate support policy and the passing of the moment when the impact of the rise in raw material prices is the greatest, we believe that the factors that suppress the company’s cash flow will be gradually relieved.
Beijing New Building Materials Public Limited Company(000786) point of view: the company is the leader of gypsum board industry and the ultimate model of China’s manufacturing industry. It still has strong growth in the future. The core highlights are: 1) gypsum board has prominent advantages of low cost and high pricing power, and high-end improves profitability. The company’s cost advantage and high pricing power lead the industry, with a production capacity of 3.358 billion square meters and a medium – and long-term target of 5 billion square meters. The cost advantage and pricing power will be further consolidated. With the increase of the proportion of medium and high-end products such as dragon brand and Taishan brand, the product price and gross profit center will rise steadily; 2) Light steel keel and gypsum mortar play a strong synergistic effect and grow rapidly; 3) Waterproof and coating business has large growth space and fast expansion speed; 4) Since 2021, there have been positive changes in the board of directors and senior management. The high-quality business philosophy will be inherited and restarted, and the company has entered a new round of growth.
Profit forecast: the company’s performance is in line with expectations. We maintain the profit forecast. It is estimated that the net profit attributable to the parent company in 22 and 23 years will be 4 billion and 4.9 billion, corresponding to 12 or 10 times of PE. The company’s profit and valuation have room to improve and maintain the “buy” rating.
Risk tip: the demand of downstream industries has fallen sharply; Gypsum board prices fell sharply; Overseas expansion is less than expected; Keel business expansion is less than expected; The expansion of waterproof field is less than expected.
