In 21 years, the income increased steadily, the performance decreased slightly, and the operation of 22q1 started well. In 2021, the overall revenue / performance of listed construction companies changed by + 14.9% / – 5.1% respectively. The revenue grew steadily (continued to be faster than the growth rate of nominal fixed investment). The anti risk ability of construction leaders was outstanding. Under the impact of epidemic, the price rise of raw materials, the large-scale and comprehensive projects and other factors in recent years, the market share continued to increase; The decline in performance was mainly due to the increase in credit risk of some private real estate customers, the provision of more impairment losses in the sector, and the rise in the price of raw materials affected the gross profit margin. The revenue / performance of the construction sector in 2022q1 increased by 14% / 12% respectively, making a good start in the year. The profit growth rate of 21q1-4 construction sector has obvious downward characteristics quarter by quarter. Under the background of continuous overweight of stable investment policy and continuous decline of base, the profit of 22q1-4 industry is expected to accelerate quarter by quarter.
Profitability is under short-term pressure, and the purchase of raw materials and the epidemic repeatedly affect cash flow. In 2021, the overall gross profit margin of the construction sector was 11.3% (yoy-0.07pct), which was mainly affected by the decline of gross profit margin of real estate development business and the rise of raw material prices. At present, the sector leaders continue to improve the profit margin of engineering business by relying on project lean management, actively adjust the business structure and increase the proportion of high-quality projects with high gross profit. The subsequent gross profit margin is expected to improve steadily. In 2021, the leader continued to promote the improvement of quality and efficiency, the rate of sales and management expenses continued to decline, while accelerating the transformation and upgrading, and the rate of R & D expenses increased. The net profit margin was 2.1% (yoy-0.4pct), mainly due to the decrease of gross profit margin and the increase of provision for impairment of real estate receivables. Inventory turnover / accounts receivable turnover continued to rise slightly. The net operating cash inflow of the whole year was 71.6 billion yuan, a year-on-year decrease of 151.1 billion yuan, mainly due to the increase of goods preparation expenditure under the background of the rise in the price of raw materials and the delay of collection due to the tight capital of real estate customers. 22q1 was repeatedly affected by the epidemic, the gross profit margin and net profit margin of the sector still fell year-on-year, and the cash outflow increased. If the epidemic is controlled later, it is expected to improve gradually throughout the year with the support of policies. The asset liability ratio of 2021 / 2022q1 sector increased slightly year-on-year. During the “14th five year plan” period, the SASAC’s assessment of the debt ratio of central enterprises has gradually changed from reducing leverage to stabilizing leverage. The restriction on the debt ratio of the sector has been reduced, which is expected to release the growth momentum.
The market share of central enterprises / state-owned enterprises continues to increase, and the steel structure and professional engineering are booming and expanding. In 2021, the top three sub sectors of revenue growth are steel structure (30%), local state-owned enterprises (24%) and professional engineering (20%), and the top three sub sectors of performance growth are international engineering (34%), local state-owned enterprises (30%) and professional engineering (24%); The top three sub sectors of 22q1 revenue growth are international engineering (23%), professional engineering (23%) and central construction enterprises (16%), and the top three sub sectors of performance growth are professional engineering (31%), local state-owned enterprises (18%) and central construction enterprises (16%). 1) The revenue performance of the construction central state-owned enterprise sector accelerated, some local state-owned enterprises grew higher than expected, the leading position was continuously consolidated, and the market share continued to increase. 2) The revenue of steel structure sector expanded rapidly and the profit growth slowed down, mainly because the rise of steel price affected the gross profit margin. Subsequently, with the stabilization of steel price trend and the continuous force of stable growth policy, the sector is expected to continue a high outlook. 3) The professional engineering sector continued to grow rapidly, mainly due to the high growth of exports last year, the rise of large quantities, the acceleration of the construction of new power systems, the continuous repair of manufacturing investment, and the high boom development trend in the subdivided directions of chemical engineering, power engineering and mining engineering.
Investment recommendations: continue to focus on recommendations that focus on steady growth mainline investment opportunities: 1) 1) undervaluebuildings central enterprises China State Construction Engineering Corporation Limited(601668) \ the; 2) High growth local state-owned enterprises Shandong Hi-Speed Road&Bridge Co.Ltd(000498) (pe6.0x), Sichuan Road & Bridge Co.Ltd(600039) (pe7.1x); 3) Infrastructure design leader China Design Group Co.Ltd(603018) (pe8x), Jsti Group(300284) (pe17x). In addition, under the impact of the early epidemic, the valuation of some high-growth and high-quality leaders has been very attractive. It is recommended to focus on the construction support equipment leader Zhejiang Huatie Emergency Equipment Science & Technology Co.Ltd(603300) (pe15x), microgrid leader Acrel Co.Ltd(300286) (pe17x), distribution network EPCO leader Suwen Electric Energy Technology Co.Ltd(300982) (pe14x), and heating energy-saving transformation leader Runa Smart Equipment Co.Ltd(301129) (pe15x).
Risk tips: the risk that the steady growth policy fails to meet expectations, the risk of impairment of accounts receivable, the risk of repeated epidemic, the risk of sharp rise in raw material prices, etc.
