The company's net profit after deducting non-return to the mother in '22 was 26.02 billion yuan, down 23% from the previous year. The company released its 22-year annual report. It achieved revenue/net profit of 199.3/314 billion yuan in '22, down 5.5%/10.7% from the previous year, and achieved net profit of 2.62 billion yuan after deducting non-return to the mother, a decrease of 23% over the previous year. Non-recurring profit was mainly asset disposal income. Among them, Q4 achieved revenue/net profit of 4.62/790 million yuan in a single quarter, minus -10.45%/+0.6% year on year, net profit of non-homing mother was 362 million yuan, a year-on-year decline of 362 million yuan 51.6%
The company's market share of gypsum board increased slightly in '22, and against the backdrop of rising costs, the gross profit margin of a single gypsum board bucked the trend, and the advantage of pricing power was evident. Channel optimization and overseas expansion may be further accelerated in the future to promote high-end product transformation. There is still room for growth in the main gypsum board business. The waterproof sector may benefit from the implementation of new waterproof standards, and we continue to be optimistic about the company's “two wings in one” development.
The volume and price of gypsum board have been reduced and waterproofing is expected to benefit from the implementation of new standards
22. The revenue of young quality building materials was 16.79 billion yuan, a decrease of 2.5% over the previous year, mainly due to falling demand affecting sales. Among them, gypsum board revenue was 13.36 billion yuan, down 3.02% from the previous year, and sales were 2,093 billion square meters, down 12% from the previous year. We calculate that the company's market share of gypsum board reached 68% in '22, which remained high. The unit price was 6.39 yuan/square meter, an increase of 0.59 yuan/square meter over the previous year (a margin of 10%). The effects of the property insurance policy in '23 may gradually become apparent. Demand for real estate completion is expected to pick up. The company is expected to further increase its market share level through channel optimization and overseas expansion, and the increase in high-end products is expected to drive up profits.
Dragons' revenue was 2.52 billion yuan, down 9% year on year. The waterproofing division achieved revenue of 3.06 billion yuan, down 19% from the previous year. Among them, revenue from waterproof membrs/waterproof coatings/waterproofing projects was 21.6/45/45 billion yuan respectively, -15.2%/-16.0%/-34.9%, respectively. The company has now promoted the layout of 16 waterproof material production bases, which will create a “1+N” industrial pattern. After the upgrading of waterproofing industry standards, it is expected that the waterproof sector will accelerate the clearance of the industry and at the same time lead to industry expansion in the future.
The gross profit of a single plasterboard flat increased slightly, and waterproofing cash flow declined
The company achieved an overall gross profit margin of 29.2% in '22, a year-on-year decrease of 2.6pct. Among them, the gross margin of gypsum board/keel/waterproof membrane was 35.0%/18.9%/17.3%, respectively, and -2.3/+0.5/-10.1pct, and the gross profit of a single flat sheet of gypsum board increased 0.07 yuan year on year. Against the backdrop of rising costs, single flat margin increased, and pricing power advantage was highlighted. The expense rate for the 22-year period was 13.8%, a slight increase of 0.8 pct over the previous year. Among them, the sales/management/R&D/finance expenses ratio was +0.1/+0.3/+0.2/+0.1pct, respectively. The final net interest rate was 15.8%, a slight decrease of 1.08pct over the previous year. The company achieved a net operating cash flow inflow of 3.66 billion yuan in '22, a decrease of 4.35% over the previous year. Of these, the net cash flow generated by the waterproof building materials division's operating activities in 2022 was -98 million yuan after deducting the impact of capital collected from the parent company. Compared with the sharp decline of 4.6 billion yuan in '21, gypsum board cash flow remained good.
Profit forecasts were lowered slightly to maintain the “buy” rating
Considering the slowdown in real estate demand growth, the 23-24 net profit forecast was lowered slightly to 3.65/ 3.9 billion yuan (previous value of 3.880.30 billion yuan), and the 25-year net profit forecast was increased by 4.43 billion yuan. Referring to comparable company valuations, we gave the company 17x target PE for 23 and lowered the target price to 36.21 yuan to maintain the “buy” rating.
Risk warning: demand for commercial and real estate decoration has declined sharply, the efficiency of waterproofing business integration falls short of expectations, etc.