\u3000\u3000 Jack Sewing Machine Co.Ltd(603337) (603337)
Event: ① on January 20, the company issued the draft of 2022 stock option and restricted stock incentive plan, which plans to grant 9.5 million rights and interests to incentive objects, accounting for about 2.13% of the total share capital of the company.
② on January 27, the company released the performance forecast for 2021, and it is expected to realize the net profit attributable to the parent company of about 480 million, yoy + 53%; The net profit of non parent company deduction was 450 million, yoy + 165%.
Core view: the company's performance meets expectations, and the performance target of equity incentive in 2022 exceeds market expectations, which shows the company's confidence in development and the company's determination to transform to a complete set of intelligent manufacturing solutions supplier for garment factory. We believe that the key for the company to achieve the performance evaluation objectives lies in: on the one hand, the overseas demand of the traditional industrial sewing machine business is expected to pick up, the company has an obvious market share advantage, and the early price increase factors are reflected in the statements, and the performance is fulfilled; On the other hand, with the implementation of model factories, intelligent complete sets of equipment enter the critical period of market introduction, which is expected to bring new performance increment.
The company's performance is in line with expectations, and the Q4 margin has improved significantly
The performance is in line with expectations and the profit side grows rapidly: in 2021, the company successfully completed the performance assessment target of the first phase of equity incentive in 2020, and achieved rapid growth at the profit side. The main reason is that the company cooperates with the upward cycle of the industry, releases the capacity advantage, the leader takes the lead in perceiving the change of industry demand, makes capacity preparation in advance, and releases the capacity advantage in the upward period of the industry, Fully grasp the important opportunities of demand recovery and market rebound.
The marginal improvement of Q4 single quarter performance is obvious, which is equivalent to the boom peak of Q1 industry. It is estimated that the company's net profit attributable to the parent company in the single quarter of 2021q4 is 145 million, with a year-on-year increase of 90.81% and a month on month increase of 80.34%, which is mainly due to: ① Q3 is the traditional off-season of the industry, and the demand of Q4 industry rebounds; ② In the same period of 2021, the personnel expansion and labor cost increased, but the income was not contributed in time; ③ The price increase in the early stage is reflected in the statement, and the profitability of the company has been improved, which is expected to become a turning point in the repair of the profitability of the company.
Equity incentive shows confidence, indicating that the company's management is full of motivation
The performance goal of equity incentive exceeded expectations, demonstrating the company's confidence in development. Calculated according to the planned performance evaluation conditions: ① evaluation objective a: the revenue of 2022-24 is 8.1/109.35/14.762 billion, yoy + 35% / 35.00% / 35.00%; Net profit of RMB 850 / 1148 / 1.55 billion, yoy + 77.08% / 35.06% / 35.02%. ② Assessment objective B: the revenue from 2022 to 24 will be 69 / 7935 / 9125 million, yoy + 15.00% / 15.00% / 15.00%; Net profit of 690 / 794 / 912 million, yoy + 43.75% / 15.07% / 14.86%. Compared with the consistent expectation of wind, the growth rate of revenue end and profit end exceeded the market expectation, which demonstrated the company's development determination. (* suppose 1. The assessment target is exactly completed every year during the assessment period; 2. The performance in 2021 is calculated based on the company's performance forecast.) Improve the incentive mechanism, attract and retain talents, and demonstrate the confidence of intelligent transformation. The incentive objects of this plan include 219 directors, senior managers, core managers and professionals of the company, covering a wide range. On the one hand, it can further establish and improve the company's long-term incentive mechanism to attract and retain excellent talents, which is conducive to fully mobilize the enthusiasm of employees and deeply bind the interests of the company; On the other hand, at present, the company is in a critical period from an industrial sewing machine supplier to a complete set of intelligent manufacturing solutions supplier for garment factories, demonstrating the company's determination to transform.
Looking forward to 2022: the overseas demand of traditional business will recover, intelligent complete sets will enter the market, and the export demand of industrial sewing machine business is expected to recover in the critical period. The company has an obvious market share advantage. ① Volume: since 2020, the overseas market demand has been continuously suppressed due to the impact of the epidemic. With the mitigation of the epidemic and the promotion of vaccines, we expect the overall export to improve in 2022. It is judged that the export in 2022 will show a trend of low before high, and the export demand is expected to continue to 2023, lengthening the upward cycle of the industry. Price: according to the official account number of the company, in 2021 December, the company's products increased third times during the year, and the average price of all products increased by 5%. It is expected that the Q1 price increase in 2022 will be reflected in the statement, and the profit margin level of the company is expected to be repaired. ③ Obvious market share advantage: in the first half of 2021, as the industry leader, the market share of the company among the leading enterprises increased to 38.16%, significantly ahead of Japan heavy machinery (Japan heavy machinery market share 24.61%), the leading position was further consolidated, and the market share advantage was obvious, which is expected to guarantee the stable growth of the company's performance. (* leading enterprises include: Jack Sewing Machine Co.Ltd(603337) , Shang Gong Group Co.Ltd(600843) , Zoje resources, Xi'An Typical Industries Co.Ltd(600302) , Japan heavy machinery, Japan brothers, Japan Pegasus and Taiwan Gaolin.)
The intelligent complete set business has entered the critical period of market introduction, which is expected to bring new performance increment. In December 2021, Jack Hangzhou model factory was put into operation, and the company continued to connect with potential customers. It is expected that the customer group of complete sets of equipment can be completed next year, and the next three years will be the key period of market introduction. Local governments implement diversified support methods such as low interest discount to promote the development of intelligent manufacturing. At present, 20 intelligent factories are under construction in China, and the future prospect is promising.
Investment suggestion: we expect the company's revenue from 2021 to 2023 to be 6.014 billion yuan, 6.923 billion yuan and 7.954 billion yuan respectively, with a year-on-year growth rate of 70.78%, 15.11% and 14.90% respectively; The net profits were 4.80, 7.16 and 8.8 respectively 1.8 billion yuan, with a year-on-year growth rate of 53.06%, 49.19% and 14.31% respectively; The corresponding P E are 24.7, 16.6 and 14.5x respectively. For the first time, a "Buy-A" rating is given.
Risk tip: the economic growth has fallen sharply, the epidemic has repeatedly affected the demand, and the penetration rate of automatic sewing equipment is lower than expected.
