This is the largest sewage treatment company in the country, but the management has a soft spot for lithium batteries.
The company is currently planning to invest in the construction of a production line with an annual output of 100,000 tons of phosphorus pentachloride . Phosphorus pentachloride is the raw material for the electrolyte - lithium hexafluorophosphate . After the project is completed, it will become the largest lithium battery electrolyte raw material production line in the country.
At present, the annual salary paid by this company to employees and executives has increased for seven consecutive years, and in 2021 it hit a record high with a salary of 104 million yuan.
This shows that the company is in a stage of rapid development and is recruiting and expanding every year.
After a full correction of 67%, the company's stock has recently embarked on a short-term upward trend.
(At the end of the article, the translator will tell you the name of the company and the stock code. Please understand the basic situation of the company objectively and impartially before revealing the final answer)
Main business and core competitiveness
Answer the phone The secretary-general is a man with a young voice and a pretty good attitude.
During the conversation, the translator learned that the main business of this company is the research and development, production and sales of water treatment agent .
The company’s water treatment agents and derivative products accounted for 73% of its revenue, and engineering construction design revenue accounted for 17%.
By analyzing the company’s financial report translator, we learned that Huatai Securities Company and Huatai Financial Holdings Company (own funds) are currently among its top ten circulating shareholders.
And these two institutions just got involved in the first quarter of this year, which also shows that the company's growth is still very good.
Other important information about the company has been introduced at the beginning of the article, so I won’t go into details here. Let’s take a look at the company’s performance.
Net profit performance
The following content and financial data are derived from the company's first quarter financial report of 2022, consolidated balance sheet on page 5, and consolidated income statement on page 8, and do not have any personal views. .
In the first quarter of 2021, this company’s net profit was only 3.44 million yuan. By the first quarter of 2022, the company's performance reached 76.21 million yuan, a significant year-on-year increase of 2115%.
And this company’s current net profit ranks 49th among 170 listed companies in the A-share sewage treatment concept sector. This ranking is not low, indicating its large scale.
In addition to its large scale, this company also has a strong ability to make money. ROE is the most effective indicator of a company's profitability. It is the ratio of net profit to shareholders' equity.
In the first quarter of 2021, the company's return on net assets was only 0.28%, which means that as long as the company provides sewage treatment services of 100 yuan, it can only earn a net profit of 0.28 yuan.
By the first quarter of 2022, the company’s return on net assets had reached 4.48%, a significant year-on-year increase of 1,500%.
The company’s current profitability, that is, the return on net assets, ranks 11th among the 170 listed companies in the A-share sewage treatment concept sector.
We can find that the ranking of the company's performance is far lower than its ability to make money. This shows that among companies with a similar size in the sewage treatment concept sector and the company, its ability to make money is the best.
Through the above analysis, we understand that in the first quarter of this year, this company was not only larger in scale, but also more capable of making money.
Reasons for performance growth
Let's analyze what caused the company's net profit to grow. This is also the most important part of this article.
By using DuPont Theory Translator, we found that the main reason for the company's performance growth in the first quarter of 2022 is the shortening of sales collection time and the expansion of profit margins for sewage treatment services.
The time for sales repayment is the accounting period for the company's sales of sewage treatment services, and it is also the time for the payment to be returned to its account. It is measured by the indicator accounts receivable turnover days .
In the first quarter of 2021, after the company provided sewage treatment services, it took 169 days to recover the service fee. But now it only takes 61 days, and the time for sales repayment has been accelerated by 64%.
The accelerated sales repayment time allows the service fee to return to the company's account faster, thus improving the company's capital use efficiency and enhancing its ability to make money.
The profit margin of sewage treatment services should be expressed using the gross sales profit margin indicator.
In the first quarter of 2021, this company provided sewage treatment services for 100 yuan, and could only earn a gross profit of 15.33 yuan, with a sales gross profit margin of 15.33%.
In the first quarter of 2022, the company also provided sewage treatment services for 100 yuan, but it could earn a gross profit of 25.98 yuan. The gross sales profit margin reached 25.98%, a significant increase of 69% year-on-year.
This company’s current sales gross profit margin, that is, its profit margin, ranks 77th among the 170 listed companies in the A-share sewage treatment concept sector. This ranking is not low, indicating that the company has high profit margins.
In summary, in 2022, due to the shortening of the company's sales collection time and the expansion of the profit margin of sewage treatment services, the company's performance in the first quarter increased.
Disadvantages
Because the translator does not write the article to recommend stocks, so at the end of this article, the translator will analyze the problems and flaws of the company in detail to give everyone a risk warning.
By analyzing the main financial data, the translator found that the company's biggest problem at present is that its cash flow capacity has been weakened, and the cash in its account is not very abundant.
In the first quarter of 2022, the company’s net profit was 76.21 million yuan. However, during the same period, the company's actual net cash earned due to operating activities was -64.36 million yuan, a year-on-year decrease of 246%.
Because of the account period and accounts receivable, the net cash flow of and is negative, which is a normal phenomenon. The difference between net profit and net cash flow is the payment that has not yet been collected, that is, accounts receivable.
The net cash flow dropped nearly three times year-on-year, which shows that in the first quarter of this year, the company's cash flow was not very abundant, and there was not a lot of cash in its account.
This is very detrimental to its production and operation, and it is also something that requires our attention.
If the fundamentals of listed companies are divided into five levels from high to low: A, B, C, D, and E, the translator personally believes that the company can maintain the level of C-level .
And this company is Qingshuiyuan Co., Ltd., stock code: 00437.
Please note: The stocks of companies with good fundamentals may not necessarily rise. But for stocks that can continue to rise sharply, the company's fundamentals must be excellent.
This article neither recommends the stock of Qingshuiyuan , nor does it say how good Qingshuiyuan Company is. Instead, it refines and translates the company's financial report.
