\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 79 Huali Industrial Group Company Limited(300979) )
Key investment points
Both production and sales are booming. Huali released its performance express. The annual revenue was 17.47 billion (+ 25.4%, US dollar caliber + 34.1%), the net profit attributable to the parent company was 2.768 billion (+ 47.3%, US dollar caliber + 57.6%), the single Q4 revenue was 4.84 billion (+ 33.5%, US dollar caliber + 35%), and the net profit attributable to the parent company was 770 million (+ 37%).
The growth of Nike and Hoka brands continues to lead, and high-quality customer orders drive the scale effect. From the disclosed situation, the orders of the top five group customers accounted for more than 93% in the first three quarters, the orders of Nike / Deckers / VF / puma / UA US dollar caliber increased by 49% / 58% / 9.4% / 24% / 69% respectively, and the orders of the top two customers Nike and Deckers accounted for 35% and 22% respectively in the first three quarters. Throughout the year, Hoka, Nike, ugg and puma brands have the strongest growth rate. The upward proportion of orders from major customers has helped the company further give play to its scale effect. The company's annual net profit margin is 15.8%, Q4 profitability continues to improve month on month compared with Q3, and the net profit margin in a single quarter reaches 15.94%, 21 showing a high profit level.
Driven by customer orders, the production capacity maintained rapid growth, and the leading position became more and more stable. In the first three quarters of 21 years, the company sold 153 million pairs, which is expected to reach 210 million pairs in the whole year, with a growth rate of about 30%. In the past 22 years, the company's capacity expansion in North Vietnam was mainly through the capacity climbing, old plant expansion and efficiency improvement of three factories in Weilin, Yongshan and Hongxin, Vietnam. From the end of 2022, the first phase of the Indonesian plant will also be put into operation, with sufficient capacity reserves. We believe that as the company gradually becomes an important supplier of first-line / emerging running brands such as Nike / hokaone / onrunning, The company's position in the industry is expected to continue to improve in 22 years. From the current order receiving situation, Huali's production capacity has become a high-quality resource that major brands are competing to seize. It has successively received orders from customers for 5 or even 8 years, which fully shows that the company has been fully recognized by customers.
Profit forecast and Valuation: as a global leader in sports shoe manufacturing, the demand for sports fashion and jogging shoes that Huali is good at is growing vigorously. Huali itself has a very outstanding reputation for quality and delivery date. Under the epidemic situation, there is still considerable progress in production expansion, which has become a solid backing for a small number of large customers to undertake the continuous growth ambition, The industry pattern of short supply is expected to enable Huali, which is still in the expansion cycle, to benefit from the double growth of orders and unit price. It is expected that the company's revenue will be 17.5/216/26.4 billion yuan in 21 / 22 / 23, with a year-on-year increase of 25% / 24% / 22%, and the net profit will reach 2.8/36/44 billion yuan, with a year-on-year increase of 47% / 29% / 23%, corresponding to the estimated value of 34 / 27 / 22x. The company's manufacturing barriers in sports shoe track are prominent, the growth path is clear, and the orders are sufficient, Maintain the "buy" rating.
Risk tip: the epidemic situation in northern Vietnam affects recruitment, and the labor cost or raw material cost rises unexpectedly
