Main points of investment
Southeast Grid released its annual report for 2021: operating income of 11.287 billion yuan in 2021, an increase of 21.94% over the same period last year, and net profit of 493 million yuan, an increase of 82.00% over the same period last year. Of this total, Q4 achieved an operating income of 2.93 billion yuan, an increase of 8.21% over the same period last year, and a net profit of-31 million yuan, an increase of 14.58% over the same period last year.
The company achieved operating income of 11.287 billion yuan in 2021, an increase of 21.94% over the same period last year. The rapid development of project general contracting business is the main driving force for revenue growth. The decline in Q4 revenue growth is mainly due to the slowdown in the progress of some steel structure engineering business in the fourth quarter and the decline in chemical fiber business. With the rapid development of general contracting business, the company adheres to the dual-engine-driven market positioning of "EPC general contracting + No. 1 project" to create southeast grid characteristic brands such as prefabricated steel structure hospitals, schools and so on.
The company achieved a comprehensive gross profit margin of 13.26% in 2021, an increase of 1.66 percentage points over last year. The increase in gross profit margin of project general contracting and chemical fiber business is the main reason for the rise of the company's comprehensive gross profit margin. The company achieved a net interest rate of 4.39% in 2021, an increase of 1.54 percentage points over the same period last year. The general contracting of the project and the increase of the gross profit margin of the chemical fiber business are the main reasons for the increase of the company's comprehensive gross profit margin.
The company's asset impairment loss + credit impairment loss in 2021 totaled 136 million yuan, accounting for 1.21% of income, an increase of 0.54% over the same period last year, mainly due to a significant increase in the provision of bad debts for accounts receivable.
Profit forecast and valuation: we have adjusted our profit forecast for the company. It is estimated that the EPS for 2022-2024 will be 0.57,0.69,0.82 yuan, respectively, and the closing price on April 11 will be 19.2,15.9 and 13.3 times, respectively, maintaining the "prudent overweight" rating.
Risk hints: macroeconomic downside risks, lower-than-expected landing of prefabricated buildings, lower-than-expected EPC business development, lower-than-expected recovery of accounts receivable, and chemical fiber product cycle fluctuation risks.
