\u3000\u3000 Suofeiya Home Collection Co.Ltd(002572) (002572)
Key investment points
The impairment risk is basically released in 2021. The company expects to achieve an operating revenue of 10.02-10.44 billion yuan in 2021, a year-on-year increase of + 20-25%; The net profit attributable to the parent company was RMB 100-150 million, a year-on-year decrease of 91.6% – 87.4%; The non net profit deducted was RMB 20-70 million, a year-on-year decrease of 98.1% – 93.3%. The sharp decline in performance in 2021 was mainly dragged down by Evergrande’s credit impairment (an increase of about 900 million yuan compared with 2020). Excluding the impact of Evergrande impairment, the net profit attributable to the parent company in 2021 was about 1-1.05 billion yuan, a year-on-year decrease of 16.1% – 11.9%.
After the pain of the adjustment period, we are optimistic about the restoration of profitability in 2022. In 2021q4, the company achieved an operating revenue of 2.78-3.2 billion yuan, a year-on-year decrease of 14.7% – 1.9%; Excluding the impact of special credit impairment losses, the net profit attributable to the parent company in 2021q4 was 150-200 million yuan, a year-on-year decrease of 69.5% – 59.4%. The main reasons for the pressure on 2021q4 profit are as follows: 1) the continuous decline of bulk business. We judge that 2021q4 bulk businesses are still under pressure and decline, and retail channels maintain positive growth. In 2022, with the continuous optimization of Engineering customer structure and the increase of the proportion of dealers, the bulk business is expected to achieve a better balance between controlling risks and restoring growth. 2) Retail reform disturbs gross profit margin and expense rate. The company promotes the reform of the whole strategy and retail channels, and the rapid increase of new SKUs leads to the reduction of short-term production efficiency; The superposition of old and new business incentive policies for dealers leads to higher costs and rebates than normal; Marketing reform and the increase of advertising and publicity expenses further pushed up the sales expense rate. The above disturbances are the temporary impact of the retail reform period. Looking forward to 2022, with the gradual maturity of new product production, the completion of business incentive mechanism switching, the optimization of marketing marketization operation mechanism, the cost investment and the gradual large-scale new business, the marketing expense rate will return to normal, and the profitability is expected to be significantly repaired. 3) The rising cost of raw materials and energy pulled down the gross profit margin. The rising prices of raw materials and energy in 2021h2 have put pressure on the gross profit margin. The company continues to raise prices in disguised form by reducing drainage patterns and colors. The price increase effect will be gradually implemented after the Spring Festival to fully alleviate the upward pressure on costs.
The whole strategy is advancing steadily, which is expected to accelerate retail sales. The company put forward the whole customization strategy in December 2021. The company expects to launch a new whole package in the “315” promotion season and complete the renovation of 300 whole stores. It is expected to complete the renovation of 800-1000 whole stores throughout the year. The whole customization strategy is expected to become an important driving force for the improvement of customer unit price, so as to drive the growth of retail end. In the medium and long term, in addition to the ” Suofeiya Home Collection Co.Ltd(002572) ” brand, Simi, Milana and other brands are also expected to gradually enter the whole era, boosting the company’s medium and long-term steady growth.
Profit forecast and investment rating: under the whole customization strategy, the company has sufficient room to improve the customer unit price. We are optimistic about the growth of retail channels under the whole strategy and marketing reform. According to the performance forecast of 2021, the company’s profit forecast is slightly lowered. We expect the net profit attributable to the parent company from 2021 to 2023 to be 130 million yuan, 1.49 billion yuan and 1.75 billion yuan respectively (the original profit forecast was 1.37 billion yuan, 1.66 billion yuan and 1.96 billion yuan), and the corresponding pe13 and 11x from 2022 to 2023. The retail channel reform and the whole customization strategy are expected to be gradually realized to the performance level from 2022. The current valuation has high cost performance and maintains the “overweight” rating.
Risk tip: the investment attraction and opening of stores are not as expected, the price of raw materials continues to rise, and the industry competition intensifies.
