\u3000\u3000 Guangdong Kinlong Hardware Products Co.Ltd(002791) (002791)
Key investment points
Profitability is under short-term pressure and may improve in 22 years, and the sales expense rate is expected to continue to be diluted
According to the company’s announcement, the gross profit margin / net profit margin of 21q4 decreased by about 4 / 7.2pct compared with the same period of 20 years. The gross profit margin has declined. First, we judge that it is due to the rise in the price of raw materials; Second, the proportion of new categories in the product structure has increased, and the new categories are currently in the promotion period with low gross profit margin. With the gradual implementation of product price increases and the marginal decline in the price of raw materials at the cost side, we expect that the pressure on the company’s gross profit margin may be relieved in 22 years. The net interest rate fell more under the influence of short-term factors. First, affected by the pre tax deduction of the second phase of equity incentive fee, Q4 income tax increased more than the same period of 20 years (- 11.65 million yuan). In addition, the impact of high-tech R & D income tax rate was also superimposed; Second, it is affected by the impairment of some real estate customers and minority shareholders’ equity; It is expected to improve in 22 years. According to the company’s announcement, at the end of the year, the number of sales and support personnel bucked the trend and expanded to about 6500, an increase of more than 20%, and the per capita output in the year 21 was about 1.5 million yuan (including tax), and the per capita efficiency continued to improve. We expect that with the continuous improvement of the number of people / human efficiency, the sales expense rate is expected to continue to be diluted.
Under the pressure of real estate funds, the company paid more attention to payment collection in the fourth quarter. It is estimated that the order of cash flow > revenue > profit is about 430 million, yoy-13.7%, which is mainly affected by the industry, and the capital chain of downstream customers is relatively tight, At the same time, the payment collection of some customers is delayed to the settlement before the Spring Festival (we expect that due to this impact, the payment collection from January to February of 22 years has improved better year-on-year). Among them, the cash flow of Q4 improved significantly in the fourth quarter, and the net operating cash flow of Q4 was 950 million, yoy + 51.9%. At the same time, according to the company’s announcement, the absolute amount of Q4 receivables decreased month on month, and the company still maintained a good operating quality. Under the tightening of real estate funds, we judge that Q4 company’s business strategy has been adjusted in stages, giving priority to ensuring the payment collection, secondly maintaining the steady growth of revenue (21 years / Q4 revenue yoy + 30.2% / 26.6%), and finally considering the profit. With the marginal easing of real estate policy, we believe that the most difficult period of the company has passed and is expected to continue to improve.
Contrarian category expansion + channel sinking to accelerate the growth into a platform company
1) in terms of product categories, with the continuous introduction and cultivation of new products, we expect that new products will grow rapidly in 21 years, of which household products will maintain a growth rate of more than 50%. Due to the large number of new products and low initial base, we expect that the growth rate of other construction hardware will be higher; Affected by the regulation of the real estate market, we expect traditional products to maintain steady growth. 2) In terms of channels, the company actively develops non real estate fields such as small and medium-sized hotels / schools / hospitals, and further sinks to speed up the layout and coverage of county outlets. We expect the county revenue to increase by more than 50% year-on-year in 21 years. 3) In terms of services, under the principle of not competing for profits with downstream construction customers, the company actively develops installation / construction and other services on products with strong installation attributes and products that have not yet formed a social division of labor, which is expected to improve customer stickiness and create new growth points. The continuous expansion and deepening of product categories, channels and services is expected to accelerate the growth of the company into a platform enterprise.
Investment suggestion: we lowered the net profit attributable to the parent company from 21 to 23 years to 9.0/13.4/1.81 billion yuan (the original net profit attributable to the parent company was 117 / 16.5 / 2.32 billion yuan), mainly considering the rise of raw materials, and increased the assumption of raw material cost. The adjusted profit forecast corresponds to 40 / 27 / 20 times the current share price PE. The company has obvious advantages in channel / comprehensive supply capacity / service, reuse channels, realize the expansion of “asset light” category, accelerate its growth into a platform / integrated leader, and maintain the “buy” rating.
Risk tip: the total demand has fallen sharply; Category expansion did not meet expectations; Channel change; Increased competition; The sharp rise in the price of raw materials has led to lower profits than expected; There is a risk that the information used in the research report is not updated in time.
