Event: the company publishes its annual report 2020 and quarterly report 2021. 1) Annual report: the total operating income was 2.069 billion yuan, + 2.37% compared with the same period last year; the net profit returned to the mother was 213 million yuan, 9.11% from the same period last year; 2) the quarterly report for 21 years: the operating income was 472 million yuan, + 50.55% from the same period last year; the net profit from the return to the mother was 44 million yuan, + 46.22% from the same period last year.
The volume of the main products increased, the price fell and the gross profit rate fell, and the expense rate remained stable during the period. The company's revenue in the past 20 years increased by 2.37% compared with the same period last year. From a product point of view, the revenue of PVC/PE/PPR pipeline is + 6.45% + 10.33% and 3.58% respectively compared with the same period last year. The company's 20-year sales gross profit margin is 23.46%. With the same caliber, the gross profit margin last year was 25.35%, down 2.39 percentage points from the same period last year, mainly due to the rise in raw material prices in the second half of the year and the intensification of market competition. The company adopted a more active sales strategy to strengthen marketing efforts. In terms of sales volume, the company's pipeline sales for the whole year were 269100 tons, an increase of 11.63% over the same period last year. From a product-by-product point of view, the gross profit margin of PVC/PP/PPR pipeline is 22.70%, 19.78%, 33.24%, respectively, and the year-on-year change is-1.5pct, which is mainly due to the sharp decline in the gross profit margin of PE business, which lowers the overall gross profit margin. In terms of the period expense rate, the sales expense rate was 3.57%, down 1.13pct from the same period last year, mainly because the company implemented the new revenue guidelines to reclassify transportation fees and sales service fees to operating costs; the management expense rate was 3.63%, an increase of 0.27pct over the same period last year; and the R & D expense rate was 3.49%, an increase in 0.48pct over the same period last year.
Cash flow improved year-on-year. The net cash flow of the company's operating activities within 20 years was 286 million yuan, an increase of 44 million yuan over the same period last year. In terms of the cash-to-cash ratio, the cash-to-cash ratio of the company within 20 years is 113.66%, which is 4.62pctMagi 's balance of accounts receivable and bills at the end of the year is 175 million yuan, which is 8.91 million yuan less than that at the beginning of the 20th year. During the period, the cash-to-cash ratio of the company is 107.75%, which is a change in 0.38pct over the same period last year.
The net cash flow of 21Q1 operating activities was-7.94 million yuan, an increase of 27.88 million yuan over the same period last year, mainly due to the increase in sales payments during the reporting period. The balance of accounts receivable and bills at the end of Q1 was 233 million yuan, + 24.52% year-on-year, far less than the income growth rate.
Investment suggestion: as the leader of plastic pipe industry in South China, the company benefits from the increase of downstream real estate concentration, the strengthening of fine decoration trend, the extension of residential warranty period and multiple policies at the infrastructure end to promote the demand for plastic pipes, the market share is expected to continue to increase. At present, the company plans to appropriately adjust the main product structure and business layout, increase the weight of municipal pipeline products, and cooperate with scientific research institutes to develop new products. It is expected that as the company's municipal business expansion and new production capacity are put into production, the company's PVC and PE pipelines are expected to continue to expand rapidly. We estimate that the return net profit of the company from 2021 to 2023 is 2.73,3.38 and 416 million yuan respectively, the corresponding EPS is 0.90,1.11,1.37 yuan respectively, and the corresponding PE is 13,10 and 8 times respectively, and the "buy" rating is maintained.
Risk hint: downstream infrastructure and real estate industry fluctuation risk, raw material price fluctuation risk, industry competition risk, production capacity release of new production projects is lower than expected.