The readings of this report are as follows:
The company's revenue and profit rose double in 2020, and its operation is resilient under the epidemic. We judge that the impact of the epidemic will dissipate in 2021, and the company is backed by the parent company, and profits are expected to continue to rise.
Main points of investment:
Maintain the "overweight" rating. In 2020, the company achieved an income of 23.42 billion yuan, an increase of 2.3%, a net profit of 780 million yuan, an increase of 18.7%, and a net profit of 740 million yuan, an increase of 21.55%, in line with market expectations. Considering that the impact of the epidemic dissipated in 2021, the company's eps in 2021-23 was increased to 0.83 (+ 0.11)\ 0.90 (+ 0.06)\ 0.98, and the target price was lowered to 12 yuan (- 3 yuan) according to the comparable company's PE14.5X,.
The quantity and price of concrete are rising, and the operation is resilient under the stress test of the epidemic. Although affected by the epidemic in 2020, the company's operating performance rose against the trend, and its net income and profit rose, while the company's newly signed contracts for the whole year reached 49.84 billion yuan, an increase of 16.9 percent. In 2020, the company's average contracted price of concrete increased by more than 10 yuan per square meter, while sales reached 5172.6 million square meters, an increase of 7.7%, both in volume and price, while the gross profit margin of concrete products increased by 1.15%. We believe that the impact of the epidemic dissipates in 2021, the company is built on the back of the parent company, superimposed business area extension, and the upward movement of the profit center for the whole year will be a high probability.
The "two wings" of "industrial chain synergy" and "Internet synergy" companies expand smoothly. The company sold 320000 tons of admixtures for the whole year, an increase of 19.6%, while the annual aggregate trading volume exceeded 7 million tons. The new business is progressing smoothly. At the same time, the drainage effect of the company's e-commerce platform is remarkable, with the annual online transaction volume reaching 1.83 billion yuan, a year-on-year increase of 147%.
The balance sheet is continuously optimized. At the end of the period, the company's cash on hand reached 5.04 billion yuan, maintaining year-on-year growth, and continued to cover interest-bearing liabilities (the company borrowed about 330 million yuan in long-term and short-term loans in 2020). The final asset-liability ratio was about 57.8%, down about 1pct from the same period last year, and the improvement of the balance sheet continued.
Risk hints: lower-than-expected landing of infrastructure projects, rising prices of raw materials, and obstacles to the development of new business