\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 79 Huali Industrial Group Company Limited(300979) )
In 2021, the net profit attributable to the parent company was 2.8 billion yuan, with an increase of 47% and 58% excluding the exchange rate
The company issued a 21 year performance express. In 2021, the revenue was 17.47 billion yuan, an increase of 25.4% (an increase of 34.1% after excluding the exchange rate), of which the revenue and growth rate of 21q1-4 were 3.7 billion (+ 7.8%), 4.5 billion (+ 28.5%), 4.4 billion (+ 31.5%) and 4.8 billion (+ 33.5%) respectively; Revenue growth is mainly due to: 1) substantial growth in revenue from major customers; 2) ASICs, on and new balance orders of new customers have been mass produced and shipped.
The company’s net profit attributable to the parent company for 21 years was 2.768 billion yuan, an increase of 47.3% (57.6% after excluding the exchange rate), of which the net profit attributable to the parent company and the growth rate of 21q1-4 were 600 million (+ 42.3%), 700 million (+ 93.2%), 700 million (+ 30.2%) and 800 million (+ 37.4%) respectively. The increase of net profit was higher than that of revenue, mainly because the company continued to implement the strategy of high-quality key customers and optimize the structure of customers and products; At the same time, actively promote automation and lean production, improve production efficiency, and increase the gross profit margin compared with 2020.
Compared with peers, the performance is brilliant, and the supply chain share of leading brands such as Nike is expected to increase
Vietnam’s epidemic prevention policy is more relaxed. Huali Vietnam factory has actively responded in terms of employee recruitment and daily management. So far, it has maintained normal operation, and the order scheduling and shipment have not been significantly affected. Among the leading shoe-making enterprises, Fengtai’s operating profit decreased by 9.8% in 21 years and Yuyuan’s operating revenue increased by 1% in 21 years. Both Vietnamese factories were greatly affected by the shutdown of the epidemic. Compared with Huali, Huali has outstanding advantages in capacity stability and obvious order increment; We expect that with the help of the epidemic, Huali will increase its binding with customers of head brands such as Nike, so as to lock in the growth of order scale in the next three years. Relying on its own advantages of capacity stability, Huali may obtain more order shares of head brands in the future; In particular, Huali currently accounts for a small share in the NIKE supply chain and still has large incremental space. Orders from Nike brands are expected to grow rapidly.
Many places in Southeast Asia have actively expanded production and rich experience in plant construction to promote the climbing of production efficiency
In order to digest the expected increment of orders, the company continues to actively expand production capacity. Three new plants put into operation in Vietnam in the next 21 years will reach production capacity one after another; The Indonesian plant will be built in stages as planned. Phase I is expected to be put into operation at the end of 22 years and contribute capacity in 23 years; The construction of Myanmar factories will be accelerated after the local situation is stable. At the same time, the company will transfer some Vietnamese management to impart experience and establish a local team to help climb the production efficiency in the future.
Maintain profit forecast and buy rating
Brand customers recovered well after the epidemic, and the order increment in 22 years was optimistic. Sports demand and sports shoes consumption continued to recover after the epidemic. From the recent financial reports of various brands, the company’s main customers increased well: Deckers fy22q3 (21 / 10 / 1-12 / 31) revenue increased by 10% at the same time; VF fy22q3 (21 / 10 / 3-22 / 1 / 1) increased by 22% at the same time; Puma fy21q4 (21 / 10 / 1-12 / 31) footwear revenue increased by 15.6% (excluding exchange rate).
Under the background of the normalization of global epidemic control and the obvious recovery trend of sports economy, we continue to be optimistic about the stability of Huali’s production capacity, strong new product development and rapid response ability, and the increase of orders in the future can be expected; At the same time, with the continuous optimization of the company’s customers and product structure, the profitability may maintain steady growth. We expect that the company’s revenue in 202223 will be 23.5 billion yuan and 29.4 billion yuan respectively, the net profit attributable to the parent company will be 3.4 billion yuan and 4.2 billion yuan respectively, the EPS will be 2.9 and 3.6 yuan / share respectively, and the PE will be 28 and 23 times respectively.
Risk tip: the order is not as expected, the cost increases, the overseas epidemic is repeated, and the capacity expansion is not as expected. The performance express is the preliminary calculation result. Please refer to the annual report.
