\u3000\u3000 Suofeiya Home Collection Co.Ltd(002572) (002572)
Performance review
The company announced the performance forecast for 2021. It is estimated that the revenue in 2021 will be 10.02 ~ 10.44 billion yuan, with a year-on-year increase of + 20% ~ + 25%. It is estimated that the net profit attributable to the parent company will be 100 ~ 150 million yuan (1.19 billion yuan in 20 years), and the net profit deducted from non attributable to the parent company will be 20 ~ 70 million yuan (1.05 billion yuan in 20 years). Among them, the revenue of 4q company was 2.78 ~ 3.2 billion yuan, with a year-on-year increase of – 14.7% ~ – 1.9%, mainly due to the suspension of Evergrande’s business. The net profit attributable to the parent company of 4q company was – 750 ~ 700 million yuan (500 million yuan in 20 years), mainly due to the provision of special credit impairment loss of about 900 million yuan for Evergrande.
Business analysis
The impairment risk is released and the young people are ready in 2022: by the end of 2021, the company’s total balance of accounts receivable and goods issued to Evergrande was 1.19 billion yuan, including 800 million yuan of accounts receivable and bills, 350 million yuan of prepayment for house purchase (purchasing Evergrande real estate with bills receivable), and the balance of goods issued was 30.163 million yuan. The company made a special credit impairment loss of about 900 million yuan for the above-mentioned funds of Evergrande, with a provision proportion of 76%. At the end of the third quarter of the 21st year, the amount of accounts receivable and bills of the company reached 1.55 billion yuan. Except for Evergrande’s 800 million yuan, at present, the bad debt risk of other funds is small. After the impairment loss of Evergrande’s funds is withdrawn in a large proportion this time, the bad debt risk of the company is basically released. It will be light in 2022, and the profit quality of the company will be significantly improved.
4q’s operating profit margin is under short-term pressure and is expected to be repaired in 2022: after restoring the impairment loss of Evergrande’s business, the company’s net profit attributable to the parent company in 2021 was 1.0-1.05 billion yuan, a year-on-year increase of – 16.1% ~ – 11.9%, of which 4q’s net profit attributable to the parent company was 150-200 million yuan, a year-on-year increase of – 69.7% ~ – 59.6%. The company’s 4q profit margin declined mainly due to: 1) the price of raw materials rose significantly in the second half of 21 years, while the price of the company’s products did not rise at the same time; 2) The company’s initial cost investment in new channels and new businesses and increased dealer support increased in the second half of the year. On the whole, with the gradual return of raw material prices to normal, the scale effect of the company’s new channels and new businesses appears, and the company’s profit margin is expected to gradually return to the normal level.
Guided by the whole customization strategy, the company’s reform has entered a substantive stage: the company’s “whole customization” strategy not only meets the needs of consumers, but also points out the future growth path for the company and dealers. With a clear strategic direction in the future, the company is determined to make in-depth changes, steadily promote the construction of new channels such as packaging and carrying bags, rapidly carry out the reloading of traditional retail stores, and the product upgrading and channel enabling changes have also entered a substantive stage. Both strategies and tactics show positive signals, and the reform results are expected to gradually appear.
Profit adjustment and investment suggestions
Due to the company’s provision for impairment losses and the large investment in the company’s new business expenses, we reduced the company’s EPS forecast from 2021 to 2023 by 91.1% / 17.6% / 10.1% to 0.13 yuan / 1.46 yuan / 1.88 yuan respectively. The current stock price corresponds to 15 and 12 times of PE in 22-23 years, maintaining the “buy” rating.
Risk tips
The completion speed is lower than expected; The expansion of packaging channels is less than expected; Milanna brand development is not smooth.
