Event: Fenglin Group released its 2021 Annual report and 2022 Quarterly report. In 2021, the company achieved an operating income of 2.066 billion yuan, an increase of 18.73% over the same period last year, a net profit of 168 million yuan, a decrease of 2.83%, and a net profit of 147 million yuan, down 4.23% over the same period last year. Of this total, 2021Q4 achieved operating income of 590 million yuan in the current quarter, an increase of 15.49% over the same period last year; net profit of 66 million yuan, up 1.85% over the same period last year; and net profit of 44 million yuan, down 12.49% from the same period last year.
In addition, the company's operating income for the quarter of 2022Q1 was 376 million yuan, down 3.69% from the same period last year; the net profit was 32 million yuan, up 79.04% from the same period last year; and the net profit from non-return was 28 million yuan, up 52.96% from the same period last year.
The wood-based panel business has grown steadily, and the production capacity has been gradually put into operation to promote sustainable development. In 2021, the company's wood-based panel business achieved revenue of 1.96 billion yuan, an increase of 14.0% over the same period last year, while the forest business achieved revenue of 76 million yuan, an increase of 18.4% over the same period last year. Under the rising prices of raw materials and repeated disturbances of the epidemic situation, the company actively optimizes the product structure and promotes the continuous improvement of production efficiency. In addition, the company's Qinzhou annual output of 500000 cubic meters of super particleboard project has achieved the first board off the line, is expected to gradually put into production in 2022, to help the company's sustainable development. At the same time, the company continues to optimize the tree species structure, improve stand quality and anti-risk ability in business afforestation.
Accounting standards adjustment superimposed the rise in raw materials, profitability has a short-term impact on profitability, the company's comprehensive gross profit margin in 2021 was 13.88%, down 12.50pct from the same period last year.
The sharp decline in gross profit margin is mainly due to the implementation of the new accounting standards, the transfer of transportation, packaging and loading and unloading costs from sales expenses to operating costs. at the same time, the increase in raw material costs also has an impact on gross profit margins. 2022Q1's gross profit margin was 15.75%, down 9.12pct from a year earlier.
In terms of period expenses, the 21-year period expense rate was 5.46%, a year-on-year decrease of 12.56pct, and the sales / management / finance / R & D expense rates were 0.68%, 6.22%, 1.44% and 1.30%, respectively, compared with the same period last year.-8.79/-1.71/-2.06/-0.10pct The decline in the rate of sales expenses and the company's conversion of transportation, packaging and loading and unloading costs from sales expenses to operating costs. The expense rate of 22Q1 during the period was 8.37%, a decrease of 12.66pct compared with the same period last year. At the same time, the company made a total goodwill impairment of about 31 million yuan to the two subsidiaries of Fenglin and Fenglin Chemical in Chizhou in 2021. Under the combined impact, the 21-year net interest rate of the company was 8.09%, down 1.43% from the same period last year. The net interest rate of 22Q1 company was 8.40%, an increase of 3.92pct over the same period last year.
Investment suggestion: the product structure of the company is continuously optimized, and the production capacity is continuously upgraded and expanded. We forecast that the operating income of Fenglin Group from 2022 to 2024 is 23.79,27.51 and 3.151 billion yuan, up 15.13%, 15.64% and 14.54% over the same period last year, and the net profit is 2.07,2.57 and 298 million yuan respectively, up 23.26%, 24.40% and 15.79% over the same period last year. The investment rating of Buy-A corresponds to PE of 15.6x, 12.6x and 10.9x.
Risk tips: capacity investment is less than expected risk; industry competition aggravates risk; raw material price fluctuation risk.