\u3000\u3 Guocheng Mining Co.Ltd(000688) 793 Shenzhen Breo Technology Co.Ltd(688793) )
Event:
On February 25, 2022, Shenzhen Breo Technology Co.Ltd(688793) released the annual performance express of 2021. In 2021, the company realized an operating revenue of 1.190 billion yuan (+ 43.93%); The net profit attributable to the parent company was 91 million yuan (+ 28.56%).
Key investment points:
Repeated impact of the epidemic, the growth of 2021q4 revenue slowed down, and the profit side was under pressure in the short term. In 2021q4, the company achieved a revenue of 376 million yuan (+ 23.77%) and a net profit attributable to the parent company of 25 million yuan (- 34.30%). (1) Revenue side: during 2021q4, the repeated outbreaks in many places across the country led to a decline in the passenger flow of transportation hubs, which had a negative impact on the business of the company's offline Direct stores located at airports and high-speed railway stations. The company's online channels maintained a good growth trend, driving the growth of the company's performance. According to magic mirror data, the sales of 2021q4 Shenzhen Breo Technology Co.Ltd(688793) on tmall Taobao and jd.com platforms were 170 million yuan and 95 million yuan respectively, with year-on-year growth of 34.78% and 54.18% respectively. (2) Profit side: the growth rate of revenue side is slowed down due to the offline epidemic, while the company continues to invest in marketing, and the sales expenses such as offline store rent and personnel cost are not reduced, resulting in short-term pressure on profits.
Promote new products and improve channel construction to help the company's performance growth. 1) Product side: adhering to product innovation, the company has continuously launched a variety of intelligent portable massage iterative new products, developed moxibustion series products represented by intelligent moxibustion box, and created a diversified product matrix of head, eye, neck, scalp, moxibustion and other series, so as to broaden the boundary of customers and meet the diversified needs of consumers. 2) Channel side: the company optimizes the layout of offline Direct stores, adds offline Direct stores in shopping centers, reduces the proportion of transportation hub stores, and reduces the negative impact of the epidemic on direct channels. At the same time, the company improved the channel construction by consolidating the advantages of e-commerce channels, developing overseas online channels and building offline franchise stores, so as to drive the growth of the company's performance.
The growth of online channels is strong, and the offline channels are expected to recover. It is rated as "buy" for the first time. The company is China's leading intelligent Portable Massager leader. The company adheres to product innovation and builds a diversified product matrix. The company's online channels grow strongly. In the future, with the improvement of the epidemic situation, the layout of offline stores will be optimized, the company is optimistic about the future elastic space of offline stores, and will be rated as "buy" for the first time. We predict that from 2021 to 2023, the net profit attributable to the parent company will be RMB 91 / 176 / 254 million, the corresponding EPS will be RMB 1.97/3.81/5.49, and the current share price will be 35.68/18.39/12.78 times PE.
Risk tips: repeated covid-19 epidemic, intensified industry competition, less than expected expansion of offline channels, less than expected promotion of new products, less than expected R & D capability, etc.
