The growth rate of newly signed orders is stable, and the cross-regional operation capacity is gradually improved. In 2021, the company signed a new order of 2.354 billion yuan, an increase of 24.81% over the same period last year. The company's newly signed order in 2021 is mainly located in East China, Central China, Southwest China and other key areas of ecological construction, the company has basically formed a national strategic layout. In 2022, the newly signed order amount of Q1 company was 1.727 billion yuan, an increase of 261.84% over the same period last year, of which the company signed a new EPC of 796 million yuan for the Qinling flood control canal upgrading and renovation project in January 2022.
Q4 revenue growth is eye-catching, gross profit margin growth is stable. In 2021, the company achieved 2.711 billion yuan in revenue, an increase of 15.95% over the same period last year. Thanks to the increase in the amount of newly signed orders, Q4's revenue growth increased significantly in a single quarter, with an increase of 57.54%. The gross profit margin was 29.69%, an increase of 0.73% over the same period last year, mainly due to a slight decline in material costs and labor costs. In the first quarter of 2022, the company achieved operating income of 430 million yuan, down 17.91% from the same period last year, or the progress of the project was hindered by the epidemic. Q1 gross profit margin increased by 1.83 percentage points to 29.74% in 2022.
During the period, the expense rate decreased, and the growth of net profit was stable, slightly exceeding expectations. The company's expense rate for the period in 2021 was 3.43%, down 2.77 percentage points from the same period last year. Among them, the management expense rate was 3.43%, an increase of 0.31% over the same period last year, mainly due to the increase in intangible assets amortization and employee incentive share payment; the R & D expense rate was 3.14%, slightly down 0.07% from the same period last year; and the financial expense rate was-3.12%, down 2.98% from the same period last year, mainly due to the increase in interest and investment return during the construction period of investment and financing projects. During the reporting period, the company lost a total of 160 million yuan in credit impairment, an increase of 30 million yuan over the same period last year. Taken together, the company achieved a net profit of 481 million yuan in 2021, a year-on-year increase of 26.4% and 280% in a single quarter. In 2022, Q1 realized a net profit of 82 million yuan, down 18.07% from the same period last year, waiting for the subsequent performance to recover.
Disturbed by the epidemic, operating cash flow has decreased, and carbon sequestration business is looking for new growth points. The company's income-to-cash ratio in 2021 was 0.3855, an increase of 0.53% over the same period last year; the cash-to-cash ratio was 0.6385, an increase of 24.05% over the same period last year, mainly due to a substantial increase in cash paid for goods and services. Overall, the operating net cash outflow was 408 million yuan, a decrease of 431 million yuan compared with the same period last year, while the net inflow of investment activities was 17 million yuan, an increase of 103 million yuan over the same period last year. The asset-liability ratio rose 4.62 percentage points year-on-year to 60.02%. The company actively develops forestry carbon sequestration business, has set up a new wholly-owned subsidiary Dongzhu carbon sequestration, and signed a "strategic cooperation agreement" with a number of local governments to jointly develop forestry resources in the relevant region. In the future, the restart of CCER transactions will make forestry resources have additional value, and carbon sequestration business is expected to become a new growth point of the company.
Investment suggestion: the growth rate of new orders signed by the company in 2021 is stable, and the net profit substantially completes the assessment requirements of the shareholding plan, slightly exceeding expectations. Q1 performance has been dragged down by the epidemic, but the growth rate of newly signed orders is strong, waiting for the performance to recover. It is estimated that the EPS of the company from 2022 to 2024 is 1.22,1.41,1.64 yuan per share, corresponding to PE8, 7, 6 times. Maintain the "highly recommended-A" rating.
Risk Tip: the company's project payback is not up to expectations, and the risk of CCER transaction restart is uncertain.
