Achieved a year-on-year revenue/net profit ratio of +3.7% /- 520 million yuan in '23, maintaining an “increase in holdings”
Keshun Co., Ltd. released its annual report. In 23, it achieved revenue of 7.944 billion yuan (yoy +3.70%), net profit to mother of 338 million yuan (yoy-516 million yuan), and deducted non-net profit of 428 million yuan (yoy - 471 million yuan). Of these, Q4 achieved revenue of 1.704 billion yuan (yoy -0.03%) and net profit of 420 million yuan (yoy-330 million yuan) to mother. Considering that new construction is still weak, we adjusted the company's 2024-2026 EPS forecast to 0.19/0.29/0.43 yuan, respectively (the previous value was 0.35/0.53 yuan for 2024-2025). Considering that the company accrues a large amount of credit impairment, it is expected to go light in 24, giving the company 27xPE in 24 years (22.4x compared to the company), with a target price of 5.15 yuan (previous value 7.6 yuan), maintaining the “gain” rating.
Raw material prices on the cost side were weak throughout the year, and the overall gross profit decline was mainly due to the fact that the engineering business dragged down the company's waterproof membrane/ waterproof coating/ waterproof engineering business in 23 years and achieved revenue of 42.01/18.94/1,470 billion yuan, -3.11%/+12.70%/+11.10% year-on-year. The revenue from the coil business declined year-on-year, mainly due to weak year-on-year effects due to poor demand. The gross profit margin for 23 years was 21.17%, -0.04pct. Among them, the gross margin of the waterproof membrane/ waterproof coating/waterproof engineering business was 18.16%/31.61%/14.18%, -0.63/+5.61/-7.63pct; 23Q4 gross profit margin was 21.11%, +1.30/ -0.24pct month-on-month. 23 Throughout the year, raw material prices on the cost side were weak. According to Wind, the average price of asphalt was -6%/-9% year-on-year in 23Q4.
Significantly accruing credit impairment losses, it is expected to go into battle lightly in 24
The cost rate for the 23-year period was 16.85%, +0.80pct, of which the sales/management/R&D/finance expense ratio was 7.91%/3.88%/4.02%/1.04%, +1.26pct/-0.05pct, year-on-year net interest rate -4.25%, -6.58pct year-on-year; 23Q4 was -24.6%, and -19.3/-25.8pct, mainly due to the company's further accounting of accounts receivable from high-risk real estate customers Reduction in impairment losses, with a total credit impairment loss of 762 million yuan. At the same time, asset impairment losses of 61 million yuan were accrued on inventory, contract assets, debt-owed real estate, etc. At the end of 23, the company's balance ratio/interest-bearing debt ratio was 62.88%/31.70%, +7.33/+12.25pct year-on-year. Net operating cash flow in '23 was $192 million, -18.47% YoY, of which 23Q4 was $1,040 million, +10.1% YoY.
The 24Q1 revenue/net profit ratio was -20.4%/-9.2%, and it is planned to implement an interim dividend in 24Q1 to achieve revenue/net profit of 1,485 billion yuan/53 million yuan, -20.43%/-9.20% YoY. 24Q1 gross margin/net profit margin was 23.81%/3.55%, +2.22pct/+0.44pct year over year, or mainly due to a further year-on-month decline in raw material prices, the average price of asphalt 24Q1 — 3.3%/-2.0% year over month. The cost rate for the 24Q1 period was 18.46%, +2.21pct year-on-year. 24Q1 net operating cash flow - $977 million, year-on-year - $320 million. The company plans not to pay cash dividends in 23 due to losses due to large accrual impairment losses, but plans to combine undistributed profits with current results for the first half of 2024 to pay cash dividends.
Risk warning: Downstream real estate starts continue to be weak; raw material prices have risen sharply.