\u3000\u3000 Easyhome New Retail Group Corporation Limited(000785) (000785)
Event: the company issued the announcement on the advance increase of annual performance in 2021. It is estimated that the net profit attributable to the parent company will reach 2.3 billion yuan to 2.58 billion yuan in 2021, an increase of 937 million yuan to 1.217 billion yuan compared with the same period of last year, a year-on-year increase of 68.75% to 89.29%; It is estimated that the net profit attributable to the parent company after deducting non profits will reach 2.30 billion yuan to 2.58 billion yuan, an increase of 998 million yuan to 1.278 billion yuan compared with the same period of last year, with a year-on-year increase of 76.65% to 98.15%.
Comments:
Exceeded the performance gambling target, and the business performance met expectations. The company’s Q4 single quarter net profit attributable to the parent company is expected to reach 580 million yuan to 860 million yuan, with a year-on-year increase of 29.8% ~ 92.3%; It is expected to realize the net profit attributable to the parent company after deducting non-profit of 590 million yuan to 870 million yuan, with a year-on-year increase of 49.7% ~ 120.7%. The wholly-owned subsidiary of the company actually deducted RMB 2.525 billion from the non parent net profit forecast center for the whole year, exceeding the performance gambling target, and the operating performance met the expectations. At the same time, under the new leasing standards, the interest expense of leasing liabilities is included in the financial expenses, resulting in a significant year-on-year increase in the financial expenses of the company in 2021, which has a certain disturbance on the performance side. It is expected that as the impact of the new leasing standards on the company gradually weakens in 2022, there is still room for further growth of the company’s profitability.
Accelerate the sinking of channels, consolidate channel advantages, make efforts to cultivate new growth drivers for self-supporting and IP services. As of September 30, 2021, the number of stores operated by the company has exceeded 400, and the number of stores in the whole year is expected to exceed 420, with the number of channels leading the industry. At the same time, the company launched the “100 counties, 100 malls” and “1000 towns, 1000 stores” projects in January 2022 to accelerate the sinking of channels, and the channel advantages are expected to be further deepened by the east wind of Rural Revitalization and furniture going to the countryside. While accelerating the expansion of offline channels, the company’s digital transformation has achieved remarkable results, and its proprietary and IP services have grown rapidly. Through every flat and every house designer, Dongwo app, self-supporting base material and auxiliary material procurement platform, Shangwu zhihuijia, smart logistics platform and Xiong dongzhijia (unexpectedly housekeeper), the Pan home whole industry chain layout from home design, production and sales, logistics distribution and back-end service has been completed. In the future, the company will increase resource investment in proprietary and IP services, and actively create a second growth curve to provide momentum for the company’s long-term growth.
Investment suggestion: accelerate the sinking of channels, lay the foundation for growth, and add momentum to the digital transformation and closed-loop service platform. The company accelerated the sinking of channels, seized the blank market in low-level cities, and provided solid support for the stable growth of the company’s home store business. At the same time, the company actively leads the digital upgrading of the industry, creates a closed-loop service platform for the home decoration industry, and provides sufficient fuel for the company’s voyage. We maintain the company’s profit forecast. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 2.45/28.5/3.28 billion respectively, corresponding to the current market value PE of 13 / 11 / 10x respectively, maintaining the “buy” rating.
Risk tip: the real estate policy regulation is uncertain, the epidemic situation is repeated, and the development of stores is less than expected.
