\u3000\u3 China Vanke Co.Ltd(000002) 705 Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) )
Core view
Event: the company announced that in 2021, it achieved a revenue of 14.912 billion yuan in 2021, a year-on-year increase of 13.05%; The net profit attributable to the parent company was 792 million yuan, a year-on-year decrease of 29.15%. In the fourth quarter alone, the company realized a revenue of 4.209 billion yuan, a year-on-year increase of 3.26%; The net profit attributable to the parent company was 198 million yuan, a year-on-year decrease of 5.26%.
In the fourth quarter, the growth rate of domestic sales picked up significantly, and Mofei’s new products performed well. In 2021, the company achieved an export revenue of about 11.6 billion yuan, a year-on-year increase of 14%; Domestic sales revenue was about 3.3 billion, a year-on-year increase of 9%. In the fourth quarter alone, affected by the high base pressure and the obstruction of shipping shipments, the export revenue of 2021q4 is expected to be about 3.1 billion, a year-on-year decrease of about 4%; In terms of domestic sales, it is estimated that the domestic sales revenue of 2021q4 is about 1.1 billion, with a year-on-year increase of 32%, slightly exceeding the market expectation. Among them, the revenue of 2021q4 moffy is about 500 million, with a year-on-year increase of 20%, which is significantly higher than Q3. It is speculated that it is mainly driven by new products; In 2021q4, Dongling achieved revenue of about 100 million, with a year-on-year increase of 6%; Other domestic sales revenue is about 500 million, with a year-on-year increase of about 55%. It is speculated that Chinese independent brands such as Yum! Brands and Chinese ODM have made outstanding contributions.
The net interest rate in the fourth quarter still fell year-on-year, and the improvement can be expected. It is speculated that the net interest rate attributable to the parent company of 2021q4 is about 4.7%, with a slight decrease of about 0.4pct year-on-year. Factors such as the high cost of raw materials and sea freight and the appreciation of RMB exchange rate all pose pressure, and the overall profitability of the company is at the bottom of history. Considering that there is still room for improvement in the above factors, and the implementation process of several rounds of price increases in domestic and foreign sales of the company may be gradually reflected, the profitability is expected to be steadily repaired upward.
Export sales are expected to resume steady growth, and domestic independent brands are expected to contribute new increment. Relying on its strong manufacturing capacity and continuous expansion of category matrix, the company’s export revenue is expected to grow steadily; In terms of domestic sales, Mofei has actively arranged new life products such as air purifiers, steam mops and floor washers. In the follow-up, with the steady increase of the company’s new product research and development efforts and the speed of innovation, the independent brand is expected to continue to contribute new increment.
Profit forecast and investment suggestions
Appropriately reduce the assumption of gross profit margin of domestic and foreign sales from 2021 to 2023. We predict that the net profit attributable to the parent company from 2021 to 2023 will be 792 / 10.34 / 1284 million (originally predicted to be 860 / 10.92 / 1.325 billion). The average PE of comparable companies after adjustment in 2022 is 17 times. Considering that the company, as the global ODM leading enterprise of western small household appliances, has outstanding advantages in R & D and manufacturing, and is expected to continue to incubate competitive new products, the domestic independent brand matrix represented by Mofei has a high growth period. The company is valued at 20 times of P / E ratio in 2022, with a premium of 15% (maintenance) compared with comparable companies, and the corresponding target price is 25.01 yuan, Maintain the “buy” rating.
Risk tips
The lack of innovation ability of new products in China leads to the risk of earnings falling short of expectations and valuation decline; Risk that ODM order demand of overseas small household appliance brands does not meet expectations
