Event: the company disclosed its 2021 annual report that its annual operating income increased by 21.94% over the same period last year to 11.287 billion yuan, its net profit increased by 82.00% to 493 million yuan, and its non-net profit increased by 95.38% to 470 million yuan. The comments are as follows:

The gross profit margin rose, and the full-year net profit increased by 82% to 493 million yuan. In 2021, the company's operating income increased by 21.94% year-on-year to 11.287 billion yuan, net profit increased by 82.00% to 493 million yuan, and non-net profit increased by 95.38% to 470 million yuan. Affected by the rising prices of raw materials such as steel and credit impairment losses, the company's fourth-quarter performance was under pressure, with operating income of 2.93 billion yuan, an increase of 8.21% over the same period last year, and net profit of-30.8681 million yuan, an increase of 14.58% over the same period last year. Deducting non-net profit-39.579 million yuan, an increase of 15.97% over the same period last year. 1) when the price of raw materials is high, the gross profit margin of the construction business is still at a good level. In 2021, the company's comprehensive gross profit margin was 13.26%, an increase of 1.65pct over the same period last year. Among them, the gross profit margin of the engineering general contracting business increased by 1.50pct to 14.67% compared with the same period last year; the gross profit margin of the steel structure subcontracting business decreased by 0.20pct to 15.27% compared with the same period last year; and benefiting from the high operation of chemical fiber prices, the company's chemical fiber business gross profit margin increased by 9.02pct to 6.37% in the fourth quarter. 2) each business data. In 2021, the project general contracting business achieved business income of 1.864 billion yuan, an increase of 177.52% over the same period last year. Steel structure plate: the company's ability to obtain orders continued to strengthen, and the cumulative number of newly signed and winning contracts in 2021 increased by 28.98% to 18.588 billion yuan over the same period last year. In addition, in the face of the rise in raw materials, the company minimized the impact of the rise in raw materials through long-term strategic cooperation and centralized procurement with important raw material suppliers. In 2021, the subcontracting business of steel structure achieved operating income of 6.06 billion yuan, an increase of 0.36% over the same period last year. Chemical fiber plate: in the first half of the year, supported by the growth of downstream textile demand and the return of orders in Southeast Asia, the sales price of polyester filament continued to rise, and the volume and price of the company's main polyester filament products rose. In the second half of the year, due to the influence of factors such as double control and epidemic situation, the degree of prosperity has declined. In 2021, the operating income of chemical fiber plate business reached 3.086 billion yuan, an increase of 51.17% over the same period last year. 3) the situation of each cost.

In 2021, the company's R & D investment increased by 22.07% over the same period last year to 403 million yuan, and there are 13 major R & D projects under way. In terms of period expenses, sales expenses in 2021 increased by 3.68% to 35.4165 million yuan compared with the same period last year; administrative expenses increased by 21.29% to 273 million yuan; and financial expenses increased by 24.15% to 88.7905 million yuan.

The ability to obtain orders continued to strengthen. In 2021, the company's cumulative number of newly signed and winning contracts increased by 28.98% to 18.588 billion yuan compared with the same period last year, which is 1.65 times the annual operating income. In 2021, the company (including holding subsidiaries) signed a total of 15 new contracts, with a cumulative contract amount of 14.21 billion yuan, an increase of 26.68% over the same period last year. Among them, 58 new contracts were signed from September to December, with a cumulative contract amount of 3.943 billion yuan. In addition, by the end of December 2021, the company had won a total of 35 uncontracted orders with a total amount of 4.377 billion yuan. In terms of production and marketing, in 2021, the company's production and sales of construction steel structure were 60.84 and 598200 tons, respectively, an increase of 26.51% and 21.96% over the same period last year; chemical fiber production and sales were 45.26 and 484400 tons, respectively, an increase of-0.96% and 18.20% over the same period last year.

The approval of non-public offerings contributes to future performance growth. The company disclosed a non-public A-share offering plan on July 21, 2020. This refinancing raised 1.2 billion yuan for EPC project general contract of Hangzhou Bay Wisdom Valley Phase II project, EPC general contract of Tonglu County first people's Hospital (120th emergency command center) relocation project and supplementary liquidity. On November 12, 2021, the application for non-public offering of shares was approved by the China Securities Regulatory Commission. This fund-raising will help ensure the smooth implementation of the above projects, further enhance the influence of the company's "assembly + EPC" business model in the market, consolidate the company's competitive advantage, and lay a solid foundation for the sustainable development of the company's future business.

Investment advice: gross profit margin increased year-on-year, annual performance increased by 84%, maintain overweight rating. It is estimated that the company's net profit in 2022-2024 will reach 6.6,8.8 and 1.15 billion yuan respectively, an increase of 33%, 34% and 31% over the same period last year, corresponding to the PE valuation of 19, 15 and 11 times. The comprehensive strength of the company is strong, the ability to obtain orders continues to be enhanced, the historical growth of steel structure business is good, and the chemical fiber business is growing rapidly. Building photovoltaic has a broad prospect and will develop well in the future.

Risk tips: raw material costs or higher-than-expected rise; EPC business rebate less than expected; BIPV business promotion is not as expected; chemical fiber high economic decline.