2022-01-17 Wang Ting of China Yinhe Securities Co., Ltd. conducted a research on Dongfang Yuhong and issued a research report entitled "the leading position in the industry is stable, and the adverse growth highlights the company's competitive advantage". The current share price is 48.28 yuan.

Dongfang Yuhong (002271) event Dongfang Yuhong released its annual results in 2021, KuaiBao, with operating income of 31.892 billion yuan in 2021, an increase of 46.76% over the same period last year, a net profit of 4.185 billion yuan, an increase of 23.50%, and a net profit of 3.885 billion yuan, an increase of 25.68% over the same period last year.
Revenue and net profit maintained high growth in the fourth quarter of 2021. In the fourth quarter of 2021, the company realized operating income of 9.21 billion yuan, an increase of 36.38% over the same period last year; realized net profit of 1.51 billion yuan, an increase of 19.7% over the same period last year; and realized net profit of 1.42 billion yuan after deducting non-return, an increase of 33.95% over the same period last year. It is not easy to maintain high growth in revenue and net profit in the fourth quarter, which shows that the company can still rely on the company's strong brand influence and multi-level marketing channel layout to achieve product sales growth in the face of poor market environment. At the same time, the company's non-waterproof business, civil construction business development trend is good, further driving the company's rapid revenue growth.
The market share has further increased, and the leading position of the industry has been firmly established. In 2021, the company's revenue maintained a growth rate of 46.76%, which is much higher than the growth rate of the industry. According to the statistics of the Building Waterproofing Association, in the first half of 2021, enterprises above the scale of the waterproofing industry achieved a total operating income of 56.991 billion yuan, an increase of 26.2% over the same period last year, and a net profit of 2.893 billion yuan, a decrease of 12.7 The company's market share has further increased, and its leading position in the industry is stable. At the same time, the company has strengthened its national layout and built or expanded production bases in Beijing, Guangdong, Hainan, Jilin, Jiangsu, Hebei, Hunan, Chongqing and other places. it includes the construction project of polymer waterproof roll material and the transformation and upgrading project of automatic production line of modified asphalt waterproof roll material and asphalt coating. In the case of the improvement of industry standards and the gradual promotion of new waterproof materials, the company is expected to maintain its leading position in the industry.
Multi-business development to effectively promote the company's business has achieved diversified development, in addition to building waterproofing business, but also involved in architectural coatings, thermal insulation materials, special mortar, building repair, nonwovens and other fields. Benefiting from the brand advantage and channel sales advantage established by the company's waterproof business section, other business areas of the company quickly entered the market and were recognized by customers. At present, in addition to the waterproof business won the first choice rate of real estate developers, architectural paint, building repair, mortar, thermal insulation materials are all recognized by the top three developers. The expansion of the business sector provides a strong support for the development of the company.
Investment suggestion as a leading enterprise in the waterproofing industry, the company has obvious advantages in products, technology, brands, marketing channels and so on. With the improvement of industry standards and industry concentration, there is still much room for improvement in the company's market share. It is estimated that the company's net profit for 22-23 years will be 5.486 billion yuan, and the earnings per share for 22-23 years will be 2.18 yuan 2.76 yuan, an increase of 31 percent over the same period last year, with a corresponding price-to-earnings ratio of 22 / 17 times. Maintain the "recommended" rating based on the company's good development expectations.
The risk indicates that the demand in the downstream application field is lower than the expected risk, and the risk that the cost of raw materials remains high.

A total of 23 agencies have rated the stock in the last 90 days, including 21 buy ratings and 2 overweight ratings; the average institutional target price in the past 90 days is 64.67; according to the Securities Star valuation analysis tool, Dongfang Yuhong (002271) good company has a rating of 4 stars, a good price rating of 2.5 stars and a comprehensive valuation rating of 3.5 stars. (rating range: 1-5 stars, up to 5 stars)