\u3000\u3 China Vanke Co.Ltd(000002) 705 Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) )
Core view
Event: the company released the annual performance express of 2021, and it is expected to realize an operating 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 increase of – 29.15%, and the net profit attributable to the parent company after deduction of non-profit was 682 million yuan, a year-on-year increase of – 26.78%.
Comments:
The double rise of domestic and foreign sales has driven the steady growth of revenue and improved the performance month on month. It is estimated that the company achieved a revenue of 4.208 billion yuan in 2021q4 single quarter, a year-on-year increase of + 3.24%, a net profit attributable to the parent company of 197 million yuan, a year-on-year increase of – 5.29%, and the growth rate increased by 36.16pct month on month (Q3 single quarter growth rate of – 41.45%). In terms of domestic and export sales, 1) domestic sales: in 2021, the company’s domestic sales revenue was about 3.3 billion yuan, with a year-on-year increase of + 9%. Among them, the company’s overseas brand Mofei and its own brand Dongling, which were exclusively authorized in China, achieved a revenue of about 1.66/240 billion yuan, with a year-on-year increase of + 10% / – 21% respectively. The slowdown in the growth of the company’s own brands was mainly affected by the high base in the same period last year. 2) Export sales: the company’s export sales revenue is about 11.6 billion yuan, a year-on-year increase of + 14%. Under the dual pressure of global epidemic disturbance and international logistics tension, the company’s export demand is still relatively strong, and the recovery of domestic and foreign sales demand is expected to drive the continuous growth of the company’s revenue.
The profitability is under short-term pressure and is expected to rebound under positive measures. According to the calculation, the annual net interest rate of the company in 2021 is about 5.3%, a decrease of 3.2pct compared with the same period last year, and the single quarter net interest rate in 2021q4 is about 4.7%, a decrease of 0.4pct compared with the same period last year. The pressure on the company’s profitability is mainly due to the rise of the exchange rate of RMB against the US dollar and the sharp rise in the price of bulk raw materials. However, the company digests the pressure of rising costs by 1) developing new products, improving production efficiency and strategically arranging procurement, 2) signing some forward foreign exchange contracts to reduce the risk of exchange rate fluctuation, and 3) taking price adjustment measures for terminal commodities, Gradually restore profitability. In the future, with the stabilization of raw material prices and the optimization of domestic sales structure, the improvement trend of the company’s profitability is expected to continue.
Launch new products of intelligent floor washing machine and lay out a new track, which can be expected in the future. Recently, the company launched Mofei intelligent floor washer mr3300 and entered the field of floor washer. The product adopts water dust circulation technology, which has the differentiated characteristics of light weight, long service life, low noise, no disassembly and cleaning, zero waste gas, super large water tank and dry and wet waste separation. The subsequent company is expected to drive the steady growth of domestic sales revenue through continuous innovation.
Investment suggestion: the new track of the floor washing machine has great demand potential at home and abroad, and maintains the “buy” rating. The company is a leading ODM enterprise of small household appliances in China, with outstanding R & D and manufacturing capabilities. The independent brand business is expected to drive the continuous growth of the company’s performance. Considering the short-term pressure of raw materials and shipping costs on the company, we fine tune the company’s profit forecast. It is estimated that the net profit attributable to the parent company from 2022 to 2023 will be 1.043/1.255 billion yuan respectively (the original forecast value is 1.089/1.352 billion yuan respectively), corresponding to 15 / 13 times of the current market value PE respectively, maintaining the “buy” rating.
Risk tip: the development of new products is less than expected, the epidemic situation in China is repeated, and the price of raw materials is rising.
