Main points of investment
Hongrun Construction released its annual report for 2021: the company's operating income in 2021 was 10.322 billion yuan, down 8.79% from the same period last year, and its net profit was 400 million yuan, down 3.46% from the same period last year. Of this total, Q4 realized operating income of 3.116 billion yuan, down 25.29% from the same period last year, and realized net profit of 132 million yuan, down 21.43% from the same period last year.
In 2021, the operating income was 10.322 billion yuan, down 8.79% from the same period last year. The business income of construction and municipal infrastructure investment business, real estate business and new energy development business reached 9.55 billion yuan, 614 million yuan and 108 million yuan respectively, which were-9.01%,-9.41% and 2.79% respectively compared with the same period last year. In the construction business, the operating income of the housing construction, municipal and rail transit businesses reached 1.563 billion yuan, 3.268 billion yuan and 4.718 billion yuan respectively, representing changes of 10.91%, 1.76% and-22.41% respectively over the same period last year. Rail transit revenue accounts for 49.40% of the construction industry revenue and 45.71% of the company's total revenue, respectively, which is the company's core business. The decline in operating revenue is the main reason for the company's total revenue decline compared with the same period last year.
In 2021, the company achieved a comprehensive gross profit margin of 11.97%, an increase of 2.18pct over last year. The net interest rate was 3.96%, down 0.75% from the same period last year. The increase in gross profit margin and the decline in net profit margin are mainly due to the return of the company's litigation-related losses to 247 million yuan in 2018, resulting in an increase in non-operating income in the previous year. The increase in gross profit margin is relatively large, we judge that, on the one hand, affected by the epidemic in 2020, the company's operating costs increased and the base of gross profit margin was low; on the other hand, the company persisted in institutionalized, standardized and meticulous management, and achieved certain results. operating costs reduced, gross profit margin increased accordingly.
In 2021, the net operating cash flow per share of the company was 0.37 yuan, which was 0.64 yuan less than that of last year, mainly due to the decrease of 299 million yuan in housing sales and 524 million yuan in PPP project repurchase compared with the same period last year.
Profit forecast and valuation: we adjust the company's profit forecast and estimate that the company's EPS will be 0.45,0.53,0.62 yuan from 2022 to 2024, and the closing price on April 22nd will be 11.6x, 9.8x and 8.3x respectively, maintaining the "prudent overweight" rating.
Risk hints: macroeconomic downside risks, lower-than-expected investment in infrastructure and municipal rail transit, deteriorating cash flow, and lower-than-expected risks in new business development.