Rating: ACCUMULATE* (Initiation)
Target price: RMB7.75
Share price (2 Sep): RMB7.20
Market Cap (RMBm): 9,648.0
Up/downside: 7.6%
We initiate coverage of Yasha Decoration with an ACCUMULATE call and PT of RMB7.75 (7.6% upside potential). 1H21 revenue came to RMB5.31bn, up 36.77% yoy, net profit was RMB99m, down 18.39%yoy, and core net profit fell 17.76%. 2Q revenue was RMB3.38bn, up 40.55% yoy, and net profit was RMB30m, down 54.67%yoy. Given the assembly and decoration industry boom, we expect its sufficient order book to sustain long-term net profit growth.
Order book focused on public installations; curtain walls/smart systems uptrend
The company signed new contracts amounting to RMB9.28bn in 1H21, up 18.90% yoy, comprising public facility installations/ residential/ decoration & design/ decoration products at RMB5.9bn/3.03bn/131m/211m. Public installations/residential orders in hand grew 24.21/10.49%. We think its focus shift to public installations was driven by worsening real estate growth. As Yasha continues to tweak its order mix, the impact of its impairment loss could weaken gradually. By segment, 1H21 revenues in architectural design & engineering/ curtain walls/ intelligent system integration grew 18%/93%/60% yoy and 4%/23%/50% from 1H19. The curtain wall and intelligent system businesses developed well.
2Q21 higher impairment loss dragged profit
1H21 total gross profit margin was 13.13% (-2.34ppt yoy), with architectural design & engineering/curtain walls GPM at 13.23%/10.05% (-2.25/-2.26ppt). 1H21 sales/ management/ R&D/ financial expense ratios were 2.98/ 3.21/ 2.84/ 0.57% ( 0.55/ 0.68/ +0.27/ -0.41ppt yoy). Asset impairments and allowances came to RMB51m, accounting for 0.97% of revenue, up 0.24ppt yoy; 2Q21 asset impairments and allowances came to RMB106m, accounting for 3.15% of revenue, which was the main reason for the decline in profit. 1H21 net margin came to 2.04%, down 1.19ppt yoy. Cash ratio in 1H21 was at 104.41%, down 2.39ppt yoy: cash payment ratio was 92.78%, down 18.69ppt yoy. Cash flow: net CFO was at negative RMB1.05bn, increasing by RMB13m yoy. Balance sheet: 1H21 gearing ratio was 60.97%, up 1.44ppt yoy. 1H21 total assets turnover rate was 0.24x, an increase of 0.06x yoy.
Leader in industrial assembly market
The company has a mature operations model in the industrial assembly. Through optimization and improvements in materials, production, design, construction and other aspects, it now holds precise control over the industrial assembly supply chain. From model houses in China to contemporary Puyu projects in Chengdu, Yasha promotes industrial assembly products from city markets to regional markets. Taking into account the impact of impairment loss, we forecast 2021/22/23E net profit of RMB410m/530m/630m. Relatively to a peer PE of 16.81x in 2021E, we assign to Yasha a PE of 25x, deriving a target price of RMB7.75.
Risks include: order repayment, assembly decoration business promotion and project execution falling below expectations.
* Note: The investment ratings given by TFI Asset Management Limited may have taken reference to the research report previously issued by other entities of the TF Group. For details, please contact us at research_tfi@tfisec.com.
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評級：累積*(啟動)
目標價：7.75元人民幣
股價(9月2日)：7.20元人民幣
市值(人民幣)：9648.0
上漲/下跌：7.6%
我們以7.75元(7.6%的上行潛力)的累計看漲期權和PT啟動雅莎裝飾的承保範圍。2011年第一季度營收53.1億元，同比增長36.77%，淨利潤9900萬元，同比下降18.39%，核心淨利潤同比下降17.76%。第二季度營收33.8億元，同比增長40.55%，淨利潤3000萬元，同比下降54.67%。考慮到組裝和裝飾業的繁榮，我們預計其足夠的訂單將維持長期的淨利潤增長。
專注於公共安裝的訂單；幕牆/智能系統上升趨勢
公司於21年上半年新籤合同額92.8億元人民幣，同比增長18.90%，其中公共設施安裝/住宅/裝修設計/裝修產品合同額59億元/30.3億元/1.31億/2.11億元。公共設施/住宅手頭訂單增長24.21/10.49%。我們認為，其重點轉向公共設施是由不斷惡化的房地產增長推動的。隨着雅莎繼續調整訂單組合，其減值虧損的影響可能會逐漸減弱。按細分市場劃分，2011年第一季度建築設計與工程/幕牆/智能系統集成收入同比增長18%/93%/60%，較19年上半年增長4%/23%/50%。幕牆和智能系統業務發展良好。
2Q21減值損失增加拖累利潤
21季度總毛利率為13.13%(同比-2.34ppt)，建築設計與工程/幕牆GPM為13.23%/10.05%(-2.25/-2.26ppt)。1h21銷售/管理/研發/財務費用比率為2.98/3.21/2.84/0.57%(同比0.55/0.68/+0.27/-0.41ppt)。資產減值準備為5100萬元，佔營收的0.97%，同比增長0.24%；2011年第二季度資產減值準備為1.06億元，佔營收的3.15%，是利潤下降的主要原因。第一季度淨利潤率為2.04%，同比下降1.19%。2011年第一季度現金比率為104.41%，同比下降2.39個百分點：現金支付比率為92.78%，同比下降18.69個百分點。現金流：淨CFO為負10.5億元，同比增加1300萬元。資產負債表：1h21槓桿率為60.97%，同比增長1.44ppt。1/21總資產週轉率為0.24倍，同比增長0.06倍。
工業裝配市場的領先者
公司在工業裝配方面擁有成熟的運營模式。通過在材料、生產、設計、施工等方面的優化和改進，它現在掌握着對工業組裝供應鏈的精確控制。從中國的樣板房到成都的當代浦宇項目，雅莎將工業組裝產品從城市市場推廣到區域市場。考慮到減值虧損的影響，我們預測2021/22/23E淨利潤為4.1億元人民幣/5.30億元/6.3億元。相對於2021年16.81倍的同業市盈率，我們賦予雅莎25倍的市盈率，得出7.75元的目標價。
風險包括：訂單還款、裝潢業務推廣和項目執行情況低於預期。
*注：TFI Asset Management Limited給予的投資評級可能參考了TF集團其他實體此前發佈的研究報告。有關詳細信息，請發送電子郵件至Research_tfi@tfaec.com與我們聯繫。
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This message is intended only for the individual or entity to which it is addressed. It may contain legally privileged and/or confidential information. TF International Securities Group Limited and its affiliates and subsidiaries (「TF Group」) does not accept liability for the unauthorized use, disclosure, distribution and/or alteration of any information it contains or the consequences thereof. If you are not an intended recipient, please inform TF Group and destroy this message immediately. Thank you.
