Events:
The company achieved revenue of 2.069 billion yuan in 2020, + 2.37% year-on-year, net profit of 213 million yuan,-9.11% year-on-year, basic earnings per share of 0.70 yuan per share, weighted average ROE of 12.32%, year-on-year-2.83pp.
The company achieved revenue of 472 million yuan in the first quarter of 2021, + 50.55% year-on-year; net profit of 43.831 million yuan, + 46.22% year-on-year, basic earnings per share of 0.14 yuan per share, weighted average ROE of 2.43%, year-on-year + 0.57pp.
Comments:
1. Q1's performance has been repaired significantly, with steady growth as a whole.
The net profit rate of sales in 2020 was 10.27%, compared with the same period last year-1.3pp. From a product-by-product point of view, the revenue share of PVC/PPR/PE pipe is 75%, 11%, 14%, and the gross profit margin is 22.7%, 33.2%, 19.8%, respectively. among them, the gross profit margin of PPR pipe is flat, and the gross profit margin of PVC/PE pipe is down, respectively, which is 8.2 pp. as a result, the comprehensive gross profit margin is reduced by 2.4pp to 23.5%, and the overall selling price per ton of pipeline products is-8% compared with the same period last year. On a quarter-by-quarter basis, 20Q1-Q4 's revenue growth in a single quarter is-26%, 9%, 6%, 14%, respectively, and its net profit is-47%, 15%, 0.4%, 6%, 6%, 6%, 14%, 14%,-47%, 15%, 0.4%, 6%, respectively. 2021Q1's revenue is + 51% compared with the same period last year, and its net profit is + 46% compared with the same period last year. Judging from the CAGR of 19Q1-21Q1 in two years, revenue / net profit from home increased steadily by 23% and 21% respectively. The net profit rate of 21Q1 sales was 9.30%, down 0.97 ppm from 2020 and 0.27 ppm from 20Q1; gross profit margin was 22.12%, down 1.34 ppm from 20-year comparable caliber, mainly due to rising raw material costs.
2. the control of expenses has been strengthened and the cash flow has been significantly improved.
The company's sales / management / R & D / financial expense rates in 2020 were 3.57%, 3.63%, 3.49%, 0.18%, respectively, compared with the same period last year. The year-on-year rate was-1.13ppb, 0.27ppmax, 0.47ppmax, 0.04ppb, respectively, and the period expense rate was from-0.35pp to 10.51%. Implement the new revenue guidelines to classify transportation charges and sales service charges as operating costs. If the same caliber is traced back, the company's sales expense rate will be the same as the same period last year, and the gross profit margin will be the same as the same period last year-0.9pp The net inflow of operating cash flow in the past 20 years was 286 million yuan, + 18% compared with the same period last year. The expense rate during the 21Q1 period of the company is 9.70%, which is better than that in the past 20 years. Except that the sales expense rate has significantly decreased due to changes in the criteria, the 1.48pp expense rate is basically the same as the same period last year. The net operating cash flow of 21Q1 is-7.94 million yuan, which is significantly better than that of 20Q1 (current value-35.82 million yuan). The company has strengthened its cash flow management.
3. The benefits of production expansion will be gradually released to consolidate the advantages and steady development.
The concentration of the pipe industry continues to improve, and the current short-term demand mainly comes from municipal engineering construction (coal to gas / urban pipe network, etc.), rural market and construction stock market, and continue to look at urbanization construction in the medium and long term. As the leader of plastic pipe in South China, the company continues to consolidate its own advantages. In terms of production capacity, the company's current capacity / output is about 410000 tons / 270000 tons, output is + 14% compared with the same period last year, and production and marketing are basically balanced. The company ploughs South China and has six major production bases in the country. Henan base turns from loss to profit, contributing income of 160 million yuan and net profit of 4.01 million yuan; Hainan base was put into production in 20 years, contributing income of 50 million yuan; Yunnan base (70,000 tons capacity) is expected to be put into production by the end of the 21st; the production of each base will help accelerate the infiltration of the local market. In terms of products, the company pays attention to the integration of industry, university and research, with R & D investment accounting for 3.5% of revenue in the past 20 years. In terms of channels, we should adhere to the combination of direct selling and distribution, deepen strategic cooperation with key customers, and ensure the quality of development.
4. Tamping the main business of pipes, new categories waiting to blossom, maintaining the "highly recommended-A" rating company as the leader of plastic pipes in South China, continuing to promote new projects in Yunnan in the past 21 years, accelerating the expansion of national layout, and seizing the strategic opportunity for the large-scale development of the western region. In addition to the main business, the company and the research institutes under the Chinese Academy of Sciences jointly carry out the research and development of new materials such as biodegradable film, facility agricultural smart pipe, etc., which is expected to add icing on the cake to the company's main business under the catalysis of environmental protection policy.
We estimate that from 2021 to 2022, the company's EPS will be 0.93,1.24 yuan respectively, corresponding to PE 12.7times and 9.5times respectively, maintaining the "highly recommended-A" rating.
5. Risk hints: the growth rate of infrastructure investment is declining, the price of raw materials is rising sharply, the production capacity is not as expected, and the development of new business is not as expected.