\u3000\u3000 Keshun Waterproof Technologies Co.Ltd(300737) (300737)
Event: the performance forecast for 2021 was released at Keshun Waterproof Technologies Co.Ltd(300737) on the evening of January 12. It is estimated that the annual net profit attributable to the parent company is 630 ~ 800 million yuan, with a year-on-year ratio of – 29.24% ~ – 10.15%, and a median value of 720 million yuan, with a year-on-year ratio of – 19.7%; Net profit deducted from non parent company was 570 ~ 740 million yuan, with a year-on-year increase of – 35.66% ~ – 16.48%, and a median of 660 million yuan, with a year-on-year increase of – 26.1%. Among them, the median net profit attributable to the parent company in the fourth quarter was 41.671 million yuan, a year-on-year increase of – 86.8%, deducting the median net profit not attributable to the parent company of 30.904 million yuan, a year-on-year increase of – 89.9%.
Impairment provision + price rise of raw materials put pressure on Q4 performance, and 22 young people start again. The main factors affecting the performance are the provision for bad debts of accounts receivable and the rise in the price of raw materials. On the one hand, credit risk events of real estate enterprises occurred frequently in the second half of the year, and the company made a more comprehensive provision for the main risk points in accounts receivable for risk consideration; On the other hand, the prices of raw materials such as 21Q4, asphalt and emulsion are still at a high level (the price of 21Q4 asphalt industry is 3099.5 yuan / ton, up 25.9% compared to 20Q4, 4% lower than that of Q3), resulting in the cost of Q4 still under pressure. We expect Q4’s gross profit margin to be basically flat compared with Q3, but it fell sharply compared with the same period last year. We believe that this more comprehensive provision gives the company the opportunity to start again with light equipment, and the recent trend of raw material prices at the cost end has stabilized. After the price adjustment at the B end is gradually implemented in 22q1, the cost pressure of the enterprise may be relieved and the profit is expected to be repaired.
Take the initiative to adjust and promote steady growth, build a bottom in demand and hope to meet the good trend. In 2021, the company was affected by the triple pressure of downstream demand downturn, sharp rise in raw material prices and credit risk of real estate enterprises. We believe that in order to cope with external pressure, the company actively adjusted its business strategy in the second half of 21, controlled risks and actively reduced its business scale, resulting in more stable Q4 revenue growth. Looking forward to 22 years, we believe that the end of the current real estate policy has come, and with the advance of infrastructure investment in 22 years, the demand for infrastructure non real estate business is expected to grow, the demand of waterproof industry is in the process of bottoming, and the company’s operation is expected to be better.
Keshun Waterproof Technologies Co.Ltd(300737) point of view reiterates:
1) with the continuous improvement of downstream (real estate and infrastructure) concentration, the increase of listed enterprises, the intervention and integration of central enterprises, the trend of industry standard improvement and other factors, the concentration of waterproof industry will still increase rapidly. With the gradual concentration of the industry, the standardization of the industry, the optimization of the competition pattern and the multiple advantages of the company as a leading enterprise, such as production capacity, channel, brand and capital, will further expand the leading advantage.
2) the company’s 10 billion target requires that the sales revenue exceed 10 billion in 2022. In the following three years, the company’s revenue will further increase and strive to reach 20 billion revenue by 2025. In terms of capacity, it is clear that the capacity will maintain a compound growth of 40% in the next three years to provide sufficient capacity guarantee for the target. The company has full confidence in achieving the 10 billion goal and can expect future development.
3) the company plans to acquire Fengze shares. The target enterprise mainly provides technical support in water stop, drainage, insulation and shock absorption for major projects such as railway, highway, construction and water conservancy, and is mainly engaged in products such as bearings, Waterstops and expansion devices. After the acquisition, the company’s products will be more extensive, diversified operation will improve its anti risk ability. At the same time, with the help of Fengze’s resources in the field of infrastructure, we will carry out business collaboration, explore the waterproof infrastructure market, and move towards diversified development and win-win results.
4) the company’s supply chain cooperation with Beixin and Karen will rely on the industry influence of all parties to form a strong resource integration advantage, improve the quality and performance of waterproof products, reduce the cost of raw materials and enhance the business competitiveness of all parties.
Investment suggestion: considering that the price rise of raw materials and the credit risk of real estate enterprises in 2021 are expected to have an impact on the company’s annual performance, we adjust the company’s profit forecast. It is expected that the company’s net profit attributable to the parent company in 21 and 22 years will be 720 million yuan and 1.24 billion yuan, corresponding to 24 and 14 times of PE. The brand building materials sector is at the bottom of the valuation range. At present, the company has comparative advantages in the field of waterproof and brand building materials and maintains the “buy” rating.
Risk tip: industry competition intensifies; Downstream real estate demand is lower than expected; The production capacity is lower than expected; The acquisition progress is less than expected; The price of raw materials fluctuates greatly; The risk of rapid growth in the scale of accounts receivable.
