Event description:
On February 26, 2021, the company announced its annual report that the company achieved a total operating income of 1.811 billion yuan, an increase of 18.74% over the same period last year, and a net profit of 315 million yuan, an increase of 26.86% over the same period last year. Of this total, 2020Q4 achieved an operating income of 462 million yuan, an increase of 18.40% over the same period last year, a decrease of 10.44% from the previous year, and a net profit of 0.85 yuan from the previous year, an increase of 32.37% over the same period last year and a decrease of 8.06% from the previous year. The net cash flow of business activities was 367 million yuan, an increase of 34.15% over the same period last year. The company's gross profit margin and net profit margin for the whole year 2020 were 30.24% and 17.34% respectively, down 1.40% / 1.20% respectively compared with the same period last year.
Event comments:
Rapid growth in production and marketing, excellent control of three fees and charges
In 2020, the company produced 57.2353 million square meters of all kinds of conveyor belts, an increase of 28.82 percent over the same period last year, and sold 58.1093 million square meters of conveyor belts, an increase of 26.00 percent over the same period last year.
The company's production and sales are growing rapidly. In 2020, the company acquired an 80% stake in Zhejiang Huaneng Transmission Technology Co., Ltd., and its conveyor belt production capacity of 5 million square meters enabled the company to further expand. Due to the difference in the structure of ring energy transmission products, the company's gross profit margin has declined slightly, but the company's net profit rate has increased by 1.2 percentage points compared with the same period last year. In 2020, the company's sales, management and R & D expenditure rates were 4.06%, 3.56% and 2.98% respectively, down 2.10%, 0.99% and 0.1% respectively from the same period last year. The financial expense rate was-0.05%, an increase of 0.5% over the same period last year, mainly due to a decrease in exchange gains from changes in the exchange rate of the US dollar over the previous year. The company's excellent cost control ability keeps the profitability high.
The production capacity of the company's conveyor belt has been greatly expanded, and the benefit of replacing road transportation highlights that the company's products are widely used in electric power, port, metallurgy, mineral and other industries to replace road transportation. Conveyor belt has the characteristics of one-time investment and low long-term cost, and with the stricter supervision of motor vehicle emissions, the replacement benefit of conveyor belt is prominent.
At present, the company has a conveyor belt production capacity of 6500 million square meters per year, and the production capacity under construction is 25 million square meters per year. They are the steel wire core conveyor belt project with an annual output of 10 million square meters and the wholly-owned subsidiary Tongxiang Desheng Belt Co., Ltd. with an annual output of 15 million square meters, which has passed the environmental assessment in November 2020. The construction period of the project is 15 months, and after it is completed and put into production, it will further increase the market share of the company's conveyor belt industry. In addition, the company will increase the investment in the main industry of conveyor belt in the next few years, and on the basis of the current annual production capacity of 65 million square meters, it will exceed 150 million square meters at the end of the 14th five-year Plan, and the company's leading position will be further strengthened.
The layout of the pension industry has progressed steadily, and the combination of medical care and nursing has made a breakthrough. Since 2012, the company has been involved in the pension industry, with the goal of creating a high-end pension service enterprise, promoting the company to expand with the light asset pension mode. In 2020, Heji Company reached medical technical cooperation with Tongxiang first people's Hospital and Jiaxing Kangci Hospital, and established a comprehensive partnership, which provided a strong guarantee for Heji Company to improve medical technology and rehabilitation nursing level. In the external expansion, at the end of 2020, Tongxiang Heji won the bid "Wutong Street Endowment Service Center Public Construction Private Project", which will further expand the scale of the pension service market in the future.
Investment rating and valuation: we believe that the company is the leader of the domestic conveyor belt industry, the capacity continues to expand and gradually reach production, optimistic about the company's long-term development. It is estimated that the annual net profit of homing in 2021-22-23 is 368, 440, 000, 200, 000, 200, 000,
Risk Tips:
Raw material price fluctuation risk; product demand is not as expected; project construction progress is not as expected.