\u3000\u3 China Vanke Co.Ltd(000002) 705 Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) )
Event: the company released the annual performance express of 2021, and realized an operating revenue of 14.91 billion yuan in 2021, an increase of 13.1% over the previous year; The net profit attributable to the parent company was 790 million yuan, a decrease of 29.2% over the previous year. Q4 company achieved a revenue of 4.21 billion yuan, a year-on-year increase of + 3.2%; The net profit attributable to the parent company was 200 million yuan, a year-on-year increase of – 5.3%; The net interest rate attributable to the parent company was 4.7%, down 0.4pcts from the same period last year.
Comments:
The export is disturbed due to the shortage of shipping, and the new categories of domestic sales have development potential. 1) Export sales: in 2021, the company’s export sales revenue was about 11.6 billion yuan, a year-on-year increase of + 14%; Q4 achieved export revenue of about 3.1 billion yuan, down 4.1% year-on-year. At present, overseas demand is still at a high level, but due to the continuous tension of international logistics capacity, the rhythm of orders and shipments of the company’s customers has been disturbed to a certain extent. 2) Domestic sales: in 2021, the company’s revenue in China was about 3.3 billion yuan, a year-on-year increase of + 9%. Among them, the company’s overseas brand Mofei, which is exclusively authorized in China, achieved a revenue of 1.66 billion yuan in the whole year, a year-on-year increase of + 10%, and still achieved stable growth under a high base; The company’s own brand, Dongling, achieved a revenue of 240 million yuan, a year-on-year increase of – 21%. The company gradually expanded from western kitchen appliances to household appliances and other fields. The sales of 21q4 moffy household appliances category increased by + 20% year-on-year, of which the ironing machine / humidifier increased by + 163% / + 138% year-on-year respectively. In February this year, moffy entered the floor washing machine industry and released new products using water dust circulation technology, which are competitive in terms of current pricing. We believe that moffy brand is expected to accelerate growth and further thicken the company’s performance in 2022.
The rise in the price of raw materials + the appreciation of RMB put pressure on profitability. In 2021, the net interest rate attributable to the parent company was 5.3%, a decrease of 3.2pcts compared with the same period in 2020. There are two main reasons: first, the company’s export business accounted for a relatively high proportion, and the rapid appreciation of RMB 21h1 led to exchange losses; Second, the price of bulk commodity raw materials has risen sharply, putting pressure on the cost side of the company. In response to these two main problems, the company stated that it had taken a series of measures to deal with them. The company digested the pressure of rising costs by launching new products and strategic procurement arrangements, and reduced the risk of exchange rate fluctuations by signing forward foreign exchange contracts and other measures. On the other hand, price adjustment measures shall be taken for the original products. Looking forward to 2022, the overseas demand may continue to operate at a high level, the international shipping pressure will gradually ease with the impact of the overseas epidemic subsided, the cost side will gradually stabilize, and the company’s performance is expected to be repaired.
Profit forecast, valuation and rating: Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) is the ODM leader of small household appliances. It implements the strategies of “one platform, professional products and professional brands” and “creative incubation, technology accumulation, product innovation and customer breakthrough” for the Chinese market to create a brand matrix to meet the personalized needs of consumers. Considering that the shipping tension caused by the epidemic has not been alleviated and the competition faced by the kitchen small household appliance industry has increased, the net profit of the company from 2021 to 23 has been reduced to 792 million yuan, 986 million yuan and 1135 million yuan (7.19% / 2.33% / 0.42% respectively compared with the previous forecast). The current share price corresponds to 20, 16 and 14 times of PE, maintaining the “buy” rating.
Risk tip: the price of raw materials increases significantly, the market competition intensifies, and the risk of exchange rate fluctuation.
