\u3000\u3 China Vanke Co.Ltd(000002) 705 Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) )
Key investment points
Event: the company released the 2021 performance express. The annual revenue of the company was 14.91 billion yuan, a year-on-year increase of 13.1%; The net profit attributable to the parent company was 790 million yuan, a year-on-year decrease of 29.2%. Based on this, we calculated that the company’s Q4 revenue in a single quarter was 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 decrease of 5.3%.
The brand business grew steadily, and the export revenue decreased slightly. The company’s Q4 single quarter can achieve positive growth, mainly due to the force of domestic sales. In terms of domestic sales, the company’s Q4 revenue in a single quarter was 1.13 billion yuan, a year-on-year increase of about 30%. Among them, the main brand Mofei increased its revenue by more than 20% in a single quarter through new products such as warm vegetable treasure and heater. In terms of export sales, due to the tight international logistics under the influence of the epidemic, the company’s customers’ orders and shipment rhythm have been affected to a certain extent. Superimposed on the high base of 2020q4 export sales, the export revenue of 2021q4 company has declined, and the export revenue of Q4 company is expected to decline by about 4% year-on-year. With the easing of international logistics, it is expected that the company’s export orders will resume steady growth.
Profitability is under short-term pressure and can be improved. On the whole, due to the rise of raw material prices and the rapid appreciation of RMB against the US dollar in the first half of 2021, the company’s profitability has declined in the short term. The company has actively taken measures to deal with: (1) digest the pressure of rising raw material prices through product structure optimization and production efficiency improvement; (2) Reduce the risk of exchange rate fluctuations through forward contracts; (3) Price adjustment measures shall be taken for the original products. The profitability of the company showed a recovery trend. The net interest rate of the company in Q4 was 4.7%, a year-on-year decrease of 0.4pp, narrowing the decline. The company’s profit base continues to improve in 2021, and the company’s performance is gradually effective under a variety of expected measures.
The product matrix continues to be enriched. As one of the leading manufacturers of small household appliances in China, the company has accumulated rich experience in R & D and manufacturing of small household appliances through ODM OEM business. In addition to small kitchen appliances, the company also has more experience in the production of small household appliances such as personal care and cleaning. Recently, the company launched the moped floor washing machine. Through the water dust circulation technology, the product has the advantages of low noise, low power consumption and longer service life. The product positioning is 2699 yuan, which is located in the middle price segment of the market. With the continuous launch of new products of Mofei, it is expected that Mofei’s sales can be further improved. In addition, the company continued to strengthen brand operation, and the incubation of brands such as Dongling, baishengtu, Gelan and mingzhan was steadily promoted. With the company’s independent brand incubation gradually taking effect, it is expected that the company’s domestic sales will continue to grow.
Profit forecast and investment suggestions. As a high-quality company of small household appliances in China, the company’s domestic and foreign sales have developed steadily. With the effectiveness of the company’s diversification measures, the pressure of rising raw material prices is gradually relieved, and the company’s profitability is expected to recover steadily. It is estimated that the EPS from 2022 to 2023 will be 1.28 yuan and 1.55 yuan respectively, maintaining the “buy” rating.
Risk warning: raw material price or large fluctuation, exchange rate or large fluctuation risk.
