\u3000\u3000 Qumei Home Furnishings Group Co.Ltd(603818) (603818)
Event overview
Qumei Home Furnishings Group Co.Ltd(603818) released the performance forecast. It is estimated that the company will realize a net profit attributable to the parent company of 205-280 million yuan in 2021, a year-on-year increase of + 97.12% - 169.23%; The net profit attributable to the parent company after deducting non profits was 175-250 million yuan, a year-on-year increase of + 84.47% - 163.53%. Quarter by quarter, the net profit attributable to the parent company of 2021q4 was 24-99 million yuan, a year-on-year increase of - 67% to + 36%; The net profit attributable to the parent company after deducting non profits was 12-87 million yuan, with a year-on-year increase of - 78% to + 60%. Among them, the performance forecast includes the company's provision for impairment losses on accounts receivable held by Evergrande group and the impact of overseas epidemic on the company's production scheduling in Southeast Asia.
Analysis and judgment:
Ekornes: overseas growth period.
Overseas Ekornes business continues to improve. In the short term, due to the impact of the Southeast Asian epidemic, production scheduling, rising prices of raw materials and shipping and other factors, the company's Southeast Asian factories have stopped production in stages in 2021q3. It is expected that with the gradual and effective control of the epidemic and the downward superposition of the prices of raw materials and shipping charges, the company's price increase will be implemented, and Q4 performance is expected to improve month on month. In the medium and long term, Ekornes's brands have full development momentum, including: 1) the business expansion of the core brand stressless is smooth. Under the background of the rapid growth of the core product comfortable chair, the rapid growth of new products such as electric chair, functional sofa and soft dining chair, and the continuous optimization of product structure; 2) The customer orders of img brand Ka have increased rapidly. Taking advantage of the natural cost advantages of labor, land and supporting supply chain in Thailand and Vietnam, the company has successively signed supply agreements with Costco, gplan and other large channels, and KA business has a good momentum of development; 3) The Chinese market has expanded rapidly. In line with the upgrading trend of Chinese consumption, the company has successively accelerated the expansion of the number of stores and experience points of stressless and img brands in the Chinese market. Ekornes's orders in the Chinese market have increased rapidly. It is expected to continue to introduce svane mattress brand in the future and further develop the Chinese market. Previously, Hillhouse investment and Yinti consulting were planned to be introduced as strategic investors, which is expected to empower Ekornes for a long time, speed up the development of the Chinese market and the layout of relevant industrial sectors, and the future growth can be expected.
China Qumei: the reform has achieved initial results, and the core business is getting better and better.
The reform has achieved initial results. In 2021, new products of Qumei Home Furnishings Group Co.Ltd(603818) brand business and new store image will be successfully spread to the market. Among them, 1) the reform of franchise business has achieved remarkable results. In 2021, the company focused on solving the problem of "beautiful stores and right goods", and the franchise business income stopped falling and rebounded; 2) The development of direct business has accelerated. The company has effectively improved its operating capacity through various ways, including the construction of "private domain traffic" and the smooth online operation of "smart store" system, so as to contribute to the increment of passenger flow and improve the management level of stores. In 2021, the direct business revenue increased by more than 40% year-on-year, and the increase was mainly due to the growth of same store sales; 3) Innovative business is growing rapidly. The company's engineering business, home decoration company's channel and drainage platform business are realized, and new business is ready to make further contributions.
Evergrande's receivables risk was gradually released, and the financial cost was continuously optimized.
By the end of 2021, the company held a total of about 37.0799 million yuan of notes and accounts receivable of Evergrande group and its member enterprises. Based on the current analysis and evaluation of the recoverability of notes and accounts receivable of Evergrande group, the company's management believes that there are signs of impairment. Therefore, this performance forecast includes the provision for bad debts of Evergrande's accounts receivable, In addition, the company optimized the structure of downstream real estate customers and steadily promoted the engineering business. In addition, since 2019, the company has effectively reduced the scale of interest bearing liabilities through private placement, the introduction of strategic investors, operational net cash flow repayment and other measures, replaced high-cost liabilities with low-cost liabilities, and the financial cost has decreased significantly. Previously, the introduction of Hillhouse investment and Yinti consulting may further reduce the total scale of interest bearing liabilities, and the financial cost pressure is expected to continue to ease.
Investment suggestions:
Qumei is undergoing positive changes and its performance is gradually released. Previously, it introduced Hillhouse investment and Yinti consulting as strategic investors, which is expected to accelerate the development of overseas Ekornes in the Chinese market and other cooperation, and help the rapid development of the company. Maintain the profit forecast of the company's revenue side. It is estimated that the company's operating revenue in 21-23 years will be 53.03/63.78/7.463 billion yuan respectively; On the profit side, taking into account the short-term impact of Evergrande's bad debt provision on the profit side in 2021, the previous profit forecast for 2021 was lowered, EPS was reduced from 0.53 yuan to 0.44 yuan, and the EPS of 2022 and 2023 was maintained at 0 According to the prediction of 85 / 1.20 yuan, according to the closing price of 11.80 yuan / share on January 28, 2022, the corresponding PE is 27 times, 14 times and 10 times respectively. Considering the accelerated release of the company's performance, the "buy" rating is maintained.
Risk tips
Risk of continuous rise in raw material prices; Risk of continued maritime tension; The risk of real estate sales falling short of expectations; Industry competition intensifies risks.
