\u3000\u3000 Anhui Huamao Textile Company Limited(000850) (000850)
Event: the company released the performance forecast for 2021, and realized the net profit attributable to the parent company of 400 ~ 450 million yuan, an increase of 80% ~ 102.51% at the same time, deducted the non net profit of 140 ~ 180 million yuan, an increase of 56.14% ~ 100.75% at the same time, and EPS of 0.42 ~ 0.48 yuan / share. The company’s performance slightly exceeded expectations, the profitability of the company’s main business was improved, and the fair value income of securities assets held by the company increased year-on-year. In 2021, the non recurring profit and loss of securities assets held by the company was about 238 million yuan.
Comments:
2021q4 net profit improved year-on-year, focusing on the main business to improve profitability. In terms of spin off, 2021q4 company achieved net profit of 56 ~ 106 million yuan and net profit deducted from non-profit of – 23 ~ 17 million yuan, which was significantly improved compared with that of – 32 million yuan / – 38 million yuan in 2020q4. In recent years, the company has focused on the main textile industry, continuously improved the level of intelligent production, optimized the product structure, and promoted the continuous improvement of the profitability of the main textile industry. Since 2018, the gross profit margin and net profit margin of the company have maintained growth, the yarn production technology level is leading in the industry, and the fabric production process has been continuously accumulated and optimized.
Introducing Shenzhou as a strategic shareholder, the layout of state-owned enterprise reform is worth looking forward to. The company actively carried out the reform of state-owned enterprises and introduced Shenzhou International as a strategic shareholder in December 2021 (Shenzhou holds 21.05% of the shares of Huamao Group), further strengthening the cooperative relationship with head customers. In the future, the company is expected to expand Shenzhou International yarn orders, strengthen cooperation in woven fabric products and promote revenue growth. In addition, 2022 is the last year of the national “three-year reform action for state-owned enterprises”. We expect the company to continue to optimize the management mechanism, improve employee incentive and promote performance growth.
Profit forecast and investment rating: we raised the net profit forecast for 2021 to 420 million yuan (the original value was 400 million yuan), and maintained the net profit forecast for 2022-23 to 482 / 592 million yuan. At present, the stock price corresponds to 9.14 times PE in 22 years. We are optimistic about the industry-leading level of the company’s production, R & D and intelligence. As a leading enterprise in the textile industry, Shenzhou’s strategic shareholding shows the quality of the company, In the future, the layout of cooperation between the two sides is expected to continue to land, with strong certainty of performance growth. At present, the valuation is at a low level and maintains the “buy” rating.
Risk factors: Shenzhou cooperation fails to meet expectations, the landing of new production capacity is less than expected, and the price of raw materials fluctuates
