\u3000\u3000 Suofeiya Home Collection Co.Ltd(002572) (002572)
Core view
Event: the company released the annual performance forecast for 2021. It is estimated that the annual operating revenue in 2021 will reach 10.023 billion yuan to 10.441 billion yuan, with a year-on-year increase of 20% to 25%; The net profit attributable to the parent company is expected to be 100 million yuan to 150 million yuan, a year-on-year decrease of 87.42% to 91.61%; It is expected to realize the net profit attributable to the parent company after deducting non-profit of RMB 20 million to RMB 70 million, a year-on-year decrease of 93.33% to 98.09%.
Comments:
Due to the superposition of multiple factors, the company’s Q4 profit side is under pressure. The net profit of the company declined significantly, mainly due to (1) affected by the credit risk exposure of the main customers of the company’s engineering business during the year, as of December 31, 2021, the balance of accounts receivable and goods issued by the company to the customers totaled 1.185 billion yuan. After careful evaluation by the company’s management, the company accrued 900 million yuan of credit impairment loss, excluding the impact of credit impairment loss, The company expects to realize a net profit attributable to the parent company of about 1 billion yuan to 1.05 billion yuan, a year-on-year decrease of 11.93% to 16.12%; (2) Affected by the rising price of raw materials, the production cost of the company increased, but the product sales price was not adjusted at the same time. On the other hand, the company also gave greater support to dealers, resulting in the decline of the company’s gross profit margin; (3) The company’s self operated packaged business and the new brand milanna were launched in the year. The investment in marketing increased, and the marketing expense rate of Q4 company increased, which reduced the company’s profit level to a certain extent.
The smooth development of new business has driven the steady growth of revenue, and the scale of revenue has exceeded the 10 billion mark. The company’s packaging business has developed smoothly, with a revenue of 313 million yuan in the first three quarters and an estimated annual revenue of more than 500 million yuan. Milanna brand has steadily expanded its channels since its launch, and the number of stores in the whole year may exceed 100. Meanwhile, the company launched the whole customization strategy in December 2021 to further promote the conversion rate and customer unit value of terminal channels through category integration. It is expected that with the gradual completion of the “whole” display upgrading of terminal stores, it is expected to add steady growth momentum to the company’s retail business.
Investment suggestion: affected by the high proportion of impairment, the performance is under pressure in the short term, and it is optimistic about the company’s profit restoration in 2022. After the company made a high proportion of impairment provision, we are still optimistic that the profitability of the company will be effectively repaired in 2022 under the joint catalysis of the continuous high growth of new business, the effective implementation of product price increase, the continuous optimization of management ability, the decline of raw material cost and other factors. However, considering the short-term pressure of impairment on the performance side, we lowered the profit forecast. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 140 / 13.7 / 1.69 billion yuan (the original value is 14.4 / 17.0 / 1.95 billion yuan), corresponding to the current market value PE of 143 / 14 / 12x, maintaining the “buy” rating.
Risk tip: real estate policy regulation risk, raw material prices fluctuate sharply, and channel development is less than expected.
