Main points of investment
Hongrun Construction released the first quarter report of 2022: the company's operating income in the first quarter of 2022 was 2.066 billion yuan, down 18.92% from the same period last year; the net profit was 103 million yuan, down 2.92% from the same period last year; and the net profit after deducting non-return was 103 million yuan, down 2.18% from the same period last year.
The company achieved operating income of 2.066 billion yuan in the first quarter of 2022, down 18.92% from the same period last year. We judge that the main business of the company is mainly concentrated in the Yangtze River Delta, and the progress of income recognition affected by the epidemic is slightly lagging behind.
The company achieved a comprehensive gross profit margin of 9.80% in the first quarter of 2022, down 0.68pct from the same period last year. Achieve a net interest rate of 4.90%, an increase in 0.80pct compared with the same period last year. We judge that the decline in gross profit margin is mainly due to the increase in operating costs due to the epidemic, while the increase in net profit margin is mainly due to the decrease in expense rate during the period.
In the first quarter of 2022, the company recovers assets + credit impairment loss of 37 million yuan, accounting for 1.80% of income, which is 15 million yuan more than that of the same period last year. We judge that it is mainly due to the recovery of bad debt losses.
In the first quarter of 2022, the net operating cash flow per share was 0.16 yuan, which was 0.22 yuan per share more than the same period last year. From the point of view of the ratio of income to cash, the ratio of income to cash in the first quarter of 2022 was 123.9% and 121.6% respectively, an increase of 13.5pct and 5.0pct over last year. The increase in cash-to-income ratio is higher than that in cash-to-cash ratio, which is the main reason for the increase in the company's net operating cash flow.
Profit forecast and valuation: we maintain the profit forecast for the company. It is estimated that the company's EPS will be 0.45,0.53,0.62 yuan from 2022 to 2024, and the closing price on April 26 will be 12.2,10.3 and 8.7 times, 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.