Furniture manufacturing giant Suofeiya Home Collection Co.Ltd(002572) (002572. SZ) decided to withdraw about 900 million yuan of bad debts in the 2021 annual report, so its non net profit deduction loss in the fourth quarter of 2021 will exceed 700 million yuan. People close to Suofeiya Home Collection Co.Ltd(002572) told Huaxia times that because the company assessed that the recoverability of accounts receivable from major customers was not large, it decided to “prepare earlier” for the account and complete the loss accrual as soon as possible.
Despite the impact of this provision, in fact, the performance of Suofeiya Home Collection Co.Ltd(002572) 2021 was fairly good. Its third quarterly report showed a bright performance, with a year-on-year increase of 23% in net profit, which has basically returned to the pre epidemic level. Or due to the great influence of key customers on the company, the share price of Suofeiya Home Collection Co.Ltd(002572) has fallen precipitously since 2021, close to halving. According to the announcement on February 6, 2022, a number of institutional investors conducted research on Suofeiya Home Collection Co.Ltd(002572) and some securities companies issued more research reports. After this encounter, Suofeiya Home Collection Co.Ltd(002572) valuation can be repaired?
net profit decreased by 90%
Recently, Suofeiya Home Collection Co.Ltd(002572) released a performance forecast that it is expected to achieve revenue of 10 billion yuan to 10.4 billion yuan in 2021, an increase of 20% to 25% year-on-year. Previously, the operating revenue in 2020 was 8.36 billion yuan; The net profit was 100 million yuan to 150 million yuan, a year-on-year decrease of 92% to 87%; Deduct non net profit of RMB 20 million to RMB 70 million, a year-on-year decrease of 98% to 93%.
It is estimated that the revenue in the fourth quarter will reach 2.8 billion yuan to 3.2 billion yuan, a year-on-year decrease of 2% to 15%; The net profit loss was 700 million yuan to 750 million yuan, after the net profit in the fourth quarter of 2020 was 500 million yuan; Deduct non net profit loss of 720 million yuan – 770 million yuan, up from 470 million yuan in 2020.
Suofeiya Home Collection Co.Ltd(002572) in the announcement, it explained three main reasons for the decline of net profit compared with the same period of last year, including the default of key customers, the rise of production costs and the continuous increase of sales expenses.
Among them, the main reason affecting the net profit is the serious breach of contract by major customers. Suofeiya Home Collection Co.Ltd(002572) said in the announcement that in the second half of 2021, the main customers of the company’s bulk business and their member enterprises suffered a large-scale breach of the due commercial acceptance bill, the bills presented to the drawer for payment were refused, and the customer could not promise the specific payment time point.
According to the data of Tonglian, as of September 30, 2021, Suofeiya Home Collection Co.Ltd(002572) has a total number of 73600 shareholders, and the chip concentration is very scattered, of which the top ten shareholders hold 63.69% and the top ten circulating shareholders hold 48.31% in total.
As of the third quarter of 2021, a number of institutions such as Hong Kong Central Clearing Co., Ltd., national social security fund and Jingshun Great Wall had ranked Suofeiya Home Collection Co.Ltd(002572) shareholder seats. However, many institutions are withdrawing, such as Cathay Pacific Fund, Xingquan fund, Ping An fund and other products.
serious breach of contract by key customers
The reporter learned that as of December 31, 2021, Suofeiya Home Collection Co.Ltd(002572) had a total balance of 1.185 billion yuan of receivables and goods issued to key customers, including 462 million yuan of accounts receivable (including 218 million yuan of accounts receivable transferred from overdue commercial acceptance bills), and 340 million yuan of undue commercial acceptance bills, The advance payment for house purchase (purchasing the customer’s real estate with notes receivable) was 352 million yuan, and the balance of goods issued was 30 million yuan.
Suofeiya Home Collection Co.Ltd(002572) said in the announcement that the above receivables will be collected by means of communication and coordination, legal proceedings and so on. The management of the company analyzed and evaluated the recoverability of the above receivables and the issued goods, and considered that there were obvious signs of impairment, and planned to withdraw special credit impairment losses for the customer. Accordingly, the company’s current credit impairment loss is estimated to increase by about 900 million yuan over the same period of last year.
People close to Suofeiya Home Collection Co.Ltd(002572) confirmed the reasons for the provision of impairment to the reporter of Huaxia times and believed that the early stripping of most of the bad debts of bulk businesses showed the company’s confidence in the development of young equipment in 2022 to a certain extent.
The aforementioned people believe that after the event of default of the major customer, the company has “stopped loss” as soon as possible and “withdrawing bad debts as soon as possible will be good for the development of the company”. After being committed to optimizing the customer structure, the company’s bulk business for key customers accounts for no more than 15%, and the performance mainly comes from the retail share.
It is noteworthy that behind the loss of Suofeiya Home Collection Co.Ltd(002572) 9 billion yuan, it is a pessimistic attitude towards the accounts receivable to some extent, but it is still unknown whether the arrears can be recovered in the future. People close to Suofeiya Home Collection Co.Ltd(002572) also confirmed to the reporter of Huaxia times that at present, the company is also “collecting debts” from the customer through litigation, but “there are too many debtors in line”.
can the valuation repair
After the opening of the year of the tiger A-share market, Suofeiya Home Collection Co.Ltd(002572) shares performed better, rising 5.71% on February 8 to close at 23.16 yuan / share, with a total market value of 21.13 billion yuan.
Previously, since March 2021, Suofeiya Home Collection Co.Ltd(002572) share price has been falling endlessly. On March 19, 2021, it was still at the high level of 38.4 yuan / share, and then fell all the way. On October 19, 2021, it was as low as 16.25 yuan / share, and the share price has been halved.
The reporter noted that since October 28, 2021, a number of institutions have conducted intensive research Suofeiya Home Collection Co.Ltd(002572) and formed a record form of investor relations activities, and then the stock price rebounded.
According to the investor relations record released on February 6, Shenwan Hongyuan Group Co.Ltd(000166) organized a telephone conference, which explained in more detail the reasons for the sharp decline in net profit.
Among them, in 2021 Suofeiya Home Collection Co.Ltd(002572) , in order to promote new business, the company gave greater support to dealers; The superposition of old and new business incentive policies resulted in higher expenses and rebates in the fourth quarter.
In addition, in engineering, due to the long cooperation time with a customer, the production efficiency has been well controlled. Since everyone is clustered in state-owned enterprises and other enterprises with relatively good credit, the gross profit of bulk projects will be at a relatively low level.
In response to various problems of the company at present, Suofeiya Home Collection Co.Ltd(002572) responded that by the end of 2021, the company’s market-oriented personnel have been in place one after another. In the future, the market-oriented operation can be carried out. The implementation point will be the charging system to make up for the increase of labor costs and travel costs. The gradual realization of large-scale operation will also effectively control the cost rate.
In addition, in 2022, the structure of engineering customers will continue to be optimized, focusing more on high-quality core real estate developers and gradually increasing the proportion of dealers, which will help the company prevent risks and establish a more perfect engineering business risk control system, so as to give full play to the advantages of the supply chain.
Some market participants believe that Suofeiya Home Collection Co.Ltd(002572) divested most of the bad debts of bulk businesses, and the valuation may need to be restored after the profits are exhausted. Among them, Haitong Securities Company Limited(600837) believes that the company currently has a triple expectation difference. At present, the first level is gradually realized (the impact of large real estate business on profit suppression is weakened, and young people go to battle in 2022). The follow-up management reform is expected to be poor and the promotion of dealers is expected to be poor, and the results are expected to be released step by step.
