What happened: the company disclosed that in the first quarter of 2022, operating income increased by 12.03% year-on-year to 2.726 billion yuan, net profit increased by 10.11% to 170 million yuan, and non-net profit increased by 8.25% to 163 million yuan. The comments are as follows:

The performance grew well, and the net profit of returning home increased by 10.11% in the first quarter. In the first quarter of 2022, the company achieved operating income of 2.726 billion yuan, an increase of 12.03% over the same period last year, a net profit of 170 million yuan, an increase of 10.11% over the same period last year, and a non-net profit of 163 million yuan, an increase of 8.25% over the same period last year. In the first quarter of 2022, the company's gross profit margin was 12.77%, down 0.87pct from the same period last year, up 1.58 pct from the same period last year; the net profit margin was 6.22%, down 0.07pct from the same period last year, and 7.21pct from the previous year. In the first quarter, the net cash flow from the company's operating activities is-243 million yuan, and the net cash flow from fund-raising activities is-947 million. The increase in cash and cash equivalents was-1.205 billion, mainly due to higher payment and repayment of loans in the current period.

For the whole year, revenue grew steadily, and net profit increased by 82% to 493 million yuan. In 2021, the company's operating income increased by 21.94% year-on-year to 11.287 billion yuan, net profit increased by 82.00% to 493 million yuan, and non-net profit increased by 95.38% to 470 million yuan. In the fourth quarter alone, the net profit increased by 14.58% to-30.8681 million yuan compared with the same period last year, and the non-net profit increased by 15.97% to-39.579 million yuan over the same period last year. 1) Q4 performance is under pressure. Affected by the rise in raw material prices and credit impairment losses, the company's fourth-quarter performance was under pressure, with operating income up 8.21% year-on-year to 2.93 billion yuan, net profit from home up 14.58% to-30.8681 million yuan, and non-net profit up 15.97% to-39.579 million yuan over the same period last year. 2) the price of raw materials is high and the gross profit margin remains at a good level. In 2021, the company's comprehensive gross profit margin was 13.26%, an increase of 1.65pct over the same period last year. Among them, the gross profit margin of the engineering general contracting business increased by 1.50pct to 14.67% compared with the same period last year; the gross profit margin of the steel structure subcontracting business decreased by 0.20pct to 15.27% compared with the same period last year; and benefiting from the high operation of chemical fiber prices, the company's chemical fiber business gross profit margin increased by 9.02pct to 6.37% in the fourth quarter. 3) all business sectors are growing well. In 2021, the operating income of the general contracting business segment of the project reached 1.864 billion yuan, an increase of 177.52% over the same period last year, while the operating income of the steel structure subcontracting business reached 6.06 billion yuan, an increase of 0.36% over the same period last year. The volume and price of the main polyester filament products of the chemical fiber plate company rose in the first half of the year, but declined in the second half of the year due to factors such as double-control production restrictions and epidemic conditions. The business income of the chemical fiber plate business reached 3.086 billion yuan in the whole year, an increase of 51.17% over the same period last year. 4) increase investment in research and development. In 2021, the company's R & D investment increased by 22.07% over the same period last year to 403 million yuan, and there are 13 major R & D projects under way. In terms of period expenses, sales expenses in 2021 increased by 3.68% to 35.4165 million yuan compared with the same period last year; administrative expenses increased by 21.29% to 273 million yuan; and financial expenses increased by 24.15% to 88.7905 million yuan.

Promote the extension of the industrial chain and realize the strategic transformation of "prefabricated architecture + BIPV". In response to the central "double carbon" development strategy, the company actively promotes the integrated layout of building-photovoltaic, combines green building with new energy, tries to promote new regional development with clean energy, devotes itself to creating a leader in the integration of green building photovoltaic, and realizes the strategic transformation of "prefabricated building + BIPV". During the reporting period, the company established Zhejiang Southeast carbon Zhonghe Technology Co., Ltd., and joined hands with Zhejiang Foster New Energy Development Co., Ltd. to establish Zhejiang Southeast Foster carbon Neutralization Technology Co., Ltd., committed to the development of roof distributed photovoltaic power station project, invest in photovoltaic power generation business and BIPV general contract project construction. The company has signed cooperation agreements or investment agreements with the town government of Ya Qian Town, Xiaoshan Economic and technological Development Zone, Shanxi Yuncheng Economic and technological Development Zone, and Tianjin Port Free Trade Zone, respectively. Make full use of their own "technological advantages, market advantages, brand advantages and model advantages" and other four core advantages Committed to the development of roof distributed photovoltaic power station projects in party and government organs, schools, hospitals, convention and exhibition centers, stadiums, complexes, industrial parks and other public buildings, industrial and commercial factories and rural houses, and invest in photovoltaic power generation business and BIPV general contract project construction.

Investment advice: performance growth is improving, gross profit margin is rising month-on-month, maintain overweight rating. It is estimated that the company's net profit from 2022 to 2024 will reach 6.6,8.8 and 1.15 billion yuan respectively, an increase of 33%, 34% and 31% over the same period last year, corresponding to the PE valuation of 19, 15 and 11 times. The comprehensive strength of the company is strong, the ability to obtain orders continues to be enhanced, the historical growth of steel structure business is good, and the chemical fiber business is growing rapidly. Building photovoltaic has a broad prospect and will develop well in the future.

Risk tips: raw material costs or higher-than-expected rise; EPC business rebate less than expected; BIPV business promotion is not as expected; chemical fiber high economic decline.