\u3000\u3000 Huali Industrial Group Company Limited(300979) (300979)
Event: the company released the performance forecast for 2021. The company expects the net profit attributable to the parent company to be RMB 2.630 ~ 2.912 billion in 2021, with a year-on-year increase of 40% ~ 55%, deducting the net profit not attributable to the parent company to be RMB 2.626 ~ 2.908 billion, with a year-on-year increase of 40% ~ 55%. Taking the median value, the company's annual performance was 2.771 billion yuan, a year-on-year increase of 47.5%. Among them, the net profit attributable to the parent company of Q4 was 633 ~ 915 million yuan, with a year-on-year increase of 13% ~ 63%. Taking the median value, the performance in the fourth quarter was 774 million yuan, a year-on-year increase of 38%. The performance of the company maintained high growth in the fourth quarter, and the annual performance slightly exceeded expectations.
The revenue of key customers of the company has increased well and the customer structure has been continuously optimized. In the first three quarters of 2021, the company's revenue increased by 23% (revenue growth rate in US dollars was 32%), orders were full in the fourth quarter, and the revenue growth rate is expected to maintain at least 20%. In terms of customers, the terminal sales of key customers are booming + the procurement share of core customers has increased. In the first three quarters of 2021, the top five customers accounted for 93%, which has been further improved. Nike and Deckers are the top two customers respectively (accounting for 35% and 22% in the first three quarters). They have maintained rapid development in 2021, especially the Nike brand. The revenue share in 2021 is expected to reach more than double digits. New powerful brands in the field of sports shoes, such as onrunning and Hoka one, have strong willingness to cooperate with the company. The company holds high-quality production capacity and has more initiative in choosing cooperative brands. The attribute of common growth with high-quality customers is obvious in the future.
The new plant can be put into operation in 22 years, and the production capacity growth remains booming. The company's main production capacity is in Vietnam, with 17 factories and three new factories in the climbing period in 21 years. At the same time, the company has undertaken some order transfers from epidemic areas in 21 years, and the utilization rate of existing production capacity is relatively saturated. In 2022, the company's plant in Indonesia is expected to be put into operation, and there are new plant plans in Vietnam. It is expected that the growth rate of production capacity will continue at about 20% next year. Huali's existing production capacity belongs to high-quality production capacity in the industry and is highly recognized by customers. At the same time, the company has accumulated rich experience in building factories in other places and has sufficient reserves of new production capacity in the future.
From the perspective of the company's development stage, the company is in the resonance period of customer structure change and capacity release. The company's share of high-quality customers represented by Nike increased significantly in 2020, the proportion of the top five customers increased in 2021, and the customer structure was further optimized in 2022. The customer structure has brought double improvements in revenue and profitability.
Investment suggestion: we believe that the future performance of the company is highly uncertain at this stage, and the current valuation has fallen back to the safe range. The future profit forecast maintains the previous judgment. It is estimated that the net profit of the company from 2021 to 2023 will be RMB 2.734 billion, 3.513 billion and 4.295 billion respectively, with growth rates of 45.55%, 28.46% and 22.27% respectively. At present, the corresponding PE of the stock price is 35.68, 27.77 and 22.71 times respectively, maintaining the "recommended" rating.
Risk tip: the epidemic situation exceeded expectations, the price rise of raw materials exceeded expectations, and the price rise of sea freight exceeded expectations.
