2021-11-01Sochow Securities Co., Ltd. Zhou Ershuang, Zhu Beibei, Luo Yue conducted a study on Zoomlion and released a research report "2021 Third Quarter Report Review: Industry Demand Fluctuations + Rising Raw Material Costs, Short-term Pressure on Third Quarter Performance", This report gives Zoomlion a buy rating, and the current stock price is 7.29 yuan.
Zoomlion(000157)
Event: The company released the third quarter report of 2021, the company's revenue in the first three quarters of 2021 was 54.427 billion yuan, +20.30% year-on-year; the net profit attributable to the mother was 5.751 billion yuan, a year-on-year increase of +1.13%; and the net profit attributable to the mother after deduction was 5.301 billion yuan, a year-on-year increase of +6.95%. The basic EPS is 0.70 yuan / share.
Investment essentials
The Q3 fist business is affected by the switch of China VI regulations, and the market volatility is large
In a single quarter, in Q3 2021, the company's revenue was 11.978 billion yuan, -27.04% year-on-year, and the net profit attributable to the mother was 901 million yuan, a year-on-year -46.01%. The company's performance has declined significantly compared with Q2, mainly due to the overall decline in industry demand in the third quarter, the decline in the scale effect of the superimposed company, and the rise in raw material costs, resulting in pressure on the company's performance. According to the China Construction Machinery Industry Association, the domestic excavator industry sold 55,500 units from July to September 2021, year-on-year - 16%; the crane industry sold 1971 units, a year-on-year -51%. The company's fist business concrete machinery, lifting machinery fluctuated greatly in the third quarter, mainly due to the implementation of the national six regulations switch in july this year, the industry cleaned up the national five inventory before Q3, and overdrafted part of the market demand in advance. The impact of environmental protection switching in the fourth quarter is expected to gradually weaken, driving market demand to improve month-on-month.
Rising raw material costs + scale effect weakening, profitability is under pressure in the short term
In terms of profitability, the company's cost reduction measures continue to advance, but due to the rising cost of raw materials and the decline in scale effects, profitability is still under great pressure. In the first three quarters of 2021, the company's comprehensive gross profit margin was 24.36%, -4.15pct, and the attributable net profit margin was 10.57%, year-on-year -2.00pct. In the first three quarters of 2021, the company's expense ratio during the period was 12.75%, -0.88pct year-on-year, of which the sales and management expense ratio was -2.33pct year-on-year, the R&D expense ratio rose by 1.62pct against the trend, and the cost control structure was optimized. At the R&D end, the company vigorously promotes the transformation of digital intelligence. On October 25, the company's W12000-450 world's largest up-slalom tower crane rolled off the production line, and the smart factory helped the advent of heavy equipment, consolidating the company's position as the first tower crane in the world. In the first three quarters of 2021, the company's net operating cash flow was 4.634 billion yuan, +15.37% year-on-year, the Q3 overdue rate decreased slightly from the previous quarter, and the risk of payment collection in the industry was low.
Diversification + internationalization contributes to the new growth pole, optimistic about the company's medium- and long-term development prospects
According to the company's medium- and long-term development plan, in the future, it will form a construction machinery, agricultural machinery, zoomlion new materials each account for 1/3 of the revenue pattern, and rebuild Zoomlion. At present, the company's fist business is lifting machinery, concrete machinery (in 2020, the two account for a total of 83% of the total revenue), emerging business excavators, aerial work platforms, high-end agricultural machinery, Zoomlion new materials development prospects are broad, the current company is small, the future is expected to grow important growth pole. The company's exports in the first half of the year increased by +52% year-on-year, the export of cranes and high-speed machines maintained a high-speed growth trend, and the globalization strategy was steadily advancing.
Market judgment: from 2022 onwards, the heavy machine boom is good, and the concrete machinery is under pressure
With the continuation of the domestic wind power boom and the recovery of the overseas construction machinery market, we expect the heavy machinery market to continue in 2022. Considering the potential impact of the tightening of downstream real estate and the decline in the area of new construction, concrete machinery may be under pressure.
Profit Forecast and Investment Rating: Taking into account the fluctuations in industry demand and the impact of rising raw material costs, we adjusted the company's net profit forecast for 2021-2023 from 90/116/12.8 billion yuan to 75/100/12 billion yuan, and the current market value corresponds to PE of 8/6/5X, maintaining a "buy" rating.
Risk warning: the industry boom has fallen sharply; new business development is less than expected; raw material prices continue to rise.
A total of 23 institutions have given ratings in the last 90 days, with 20 buy ratings and 3 overweight ratings; the average target price of institutions in the past 90 days has been 12.5; the Securities Star Valuation Analysis Tool shows that Zoomlion (000157) good company rating is 2.5 stars, good price rating is 4 stars, and valuation comprehensive rating is 3.5 stars.