Event description:
On April 28, 2021, the company announced its quarterly report for 2021 that its operating income in the first quarter was 377 million yuan, an increase of 26.31% over the same period last year. Its net profit was 57.8308 million yuan, an increase of 8.27% over the same period last year, and basic earnings per share was 0.14 yuan, an increase of 7.69% over the same period last year.
Event comments:
Sales growth is stable and production capacity is gradually released.
The company's sales growth was stable in the first quarter, with sales revenue up 26.31%, and sales gross profit margin of 26.08%, an increase of 2.93 pct over 20-year Q4. In terms of expense rate, the sales / management / finance / R & D expense rate in the first quarter was 3.58%, 8.14%, 0.30%, 3.21%, respectively, compared with the same period last year-1.34%, 0.83%, 1.99%, 0.41%. The increase in management expenses is due to the reduction of social insurance premiums by the government in the same period last year, and the decrease in financial expenses is due to the increase in exchange gains generated by the exchange rate of foreign currencies against RMB in the current period over the previous year. At the end of the first quarter, the construction under construction decreased by 49.49% compared with the beginning of the period. Some workshop housing projects were consolidated in this period, and the company's conveyor belt increased by 15 million square meters in the first quarter compared with the same period last year. The gradual release of the company's new capacity is expected to further consolidate the company's leading position in the industry.
Steady expansion of production is expected to quickly seize the incremental part of the industry.
Conveyor belt 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.
According to the Rubber Industry Association, the domestic conveyor belt output target of the 14th five-year Plan is as high as 810 million square meters, and the national output in 2019 is only 500 million square meters, with large increment space. The company is constantly expanding conveyor belt production capacity, currently under construction capacity of 2500 million square meters / year, respectively for the annual output of 10 million square meters of steel rope core conveyor belt project and wholly-owned subsidiary Tongxiang Desheng Belt Co., Ltd. annual output of 15 million square meters of high-strength energy-saving and environmental protection conveyor belt project. 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. We believe that the company will quickly seize the incremental part of the industry through continuous production expansion.
The business of providing for the aged has progressed steadily, and the second nursing hospital has opened smoothly.
The company has been involved in the pension industry since 2012, with the goal of creating a high-end pension service enterprise, promoting the company's external expansion with a light asset pension model. In the first quarter, Tongxiang and Jizhouquan Nursing Home, the second integrated medical and nursing home under the subsidiary Tongxiang and Ji, opened. With the aggravation of the problem of aging population, the company's pension business is expected to advance steadily 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,
Risk Tips:
The risk of raw material price fluctuation; the product demand is not as expected; the project construction progress is not as expected.