2021 orders are growing steadily, and the BIPV project may be significantly increased. The amount of new projects signed by the company in 2021 was 4.208 billion yuan, an increase of 11.8%, and the amount of orders gradually rebounded in the past three years. By the end of 2021, the amount of orders in hand is 3.01 billion yuan, and the revenue ratio of orders in hand is 0.96. it can be seen that the turnover of metal roofing projects is faster. In terms of BIPV, on March 7, 2022, the company won the bid for Shandong heavy Industry BIPV roof project, with a winning amount of about 800 million yuan, accounting for 25.48% of revenue, which is currently the largest single BIPV construction order. The construction period is 150 days, and with the improvement of the epidemic situation in many places, the project may be launched this year. We expect that a number of BIPV framework agreements signed by the company last year will gradually become large BIPV orders, significantly thickening the performance. In addition, the amount of soil remediation orders signed by the company ranks among the top three in the industry, with a cumulative winning bid of more than 700 million yuan in 2021.

Revenue has declined slightly, and BIPV orders may significantly boost performance. In 2021, the company achieved 3.14 billion yuan in revenue, down 0.41% from the same period last year, mainly due to the epidemic situation affecting project acceptance and settlement. In terms of products, the revenue from metal roofing was 2.786 billion yuan, an increase of 2.83%, and the gross profit margin was 16.55%, down 0.95% from the same period last year, mainly due to the increase in the price of raw materials and the cost; the income from soil restoration was 306 million yuan, down 4.94% from the same period last year, and the gross profit margin was 23.33%. Down 1.61 percentage points. 2022Q1's revenue was 612 million yuan, a slight increase of 0.75% over the same period last year, and its gross profit margin was 19.55%, down 0.22% from the same period last year. The company's large BIPV orders are expected to land in the second half of the year, which is expected to drive significant growth, while we estimate that BIPV gross profit margin is higher than traditional metal roofing, which is expected to improve the overall profitability of the company.

During the period, the expense rate increased, and the impairment dragged down the net profit. In 2021, the expense rate during the company period was 10.18%, an increase of 0.77 percentage points over the same period last year. Among them, the rate of sales and management expenses increased by 0.21% and 0.46% respectively compared with the same period last year, mainly due to the increase in BIPV business development expenses; the rate of financial expenses decreased by 0.23% year-on-year, mainly due to the decrease of interest expenses related to convertible debt for equity and redemption; and the rate of R & D expenses increased by 0.33% year-on-year. The total loss of assets and credit impairment in the current period was about 181 million yuan, a sharp increase of 186 million yuan over the same period last year, mainly due to the increase in bad debts due to the single provision adopted by some customers. Taken together, the net profit of 2021 was 32.81 million yuan, down 82.02% from the same period last year. 2022Q1 realized a net profit of 41.22 million yuan, down 10.38% from the same period last year.

Cash flow has deteriorated and asset-liability ratios have declined. The cash-to-cash ratio of the company is 0.7892, down 3.58% from the same period last year, and the cash-to-cash ratio is 0.7996, down 5.58% from the same period last year. Taken together, the operating net cash inflow was 32.97 million yuan, which was 22.12 million yuan less than that of the same period last year, mainly due to the increase in the price of raw materials. There was a net cash outflow of 93.4 million yuan from investment activities, 6.35 million yuan less than that of the same period last year. The company's asset-liability ratio was 48.73%, down 8.66 percentage points from the same period last year, mainly due to a sharp reduction in bonds payable. In terms of BIPV products, Longding three-generation series of products have been launched, which can match the standard photovoltaic modules commonly used in the market, with high power generation and installation efficiency, mainly used in large area building roofing systems, and obvious competitive advantages in the market.

Investment advice: the company's annual report is in line with expectations. As the epidemic gradually stabilizes in many places, the construction progress of the company's project is expected to return to normal, and BIPV orders are expected to significantly increase and land on the ground. We gave the company an EPS of 0.56,1.06,1.68 yuan per share in 2022-2024, with a corresponding PE of 51.8,27.6,17.4 times respectively, maintaining a "prudent recommendation-A" rating.

Risk tips: raw material prices fluctuate sharply, the expansion of BIPV projects is not as expected, and the epidemic continues to disturb.