\u3000\u3 Shengda Resources Co.Ltd(000603) 889 Zhejiang Xinao Textiles Inc(603889) )
Event overview
The company released the performance express for 21 years. In 2021, the company realized revenue / net profit attributable to the parent / net profit deducted from non attributable to the parent were RMB 3.47/293280 billion respectively, with a year-on-year increase of 53% / 93% / 178%, which was in line with the performance forecast. 21q4 revenue / net profit attributable to parent company / net profit deducted from non attributable to parent company were RMB 765 million / 37 million / 35 million respectively, with a year-on-year increase of 38% / - 24% / - 35%. The growth rate slowed down month on month (21q3 revenue / net profit attributable to parent company increased by 47% / 593% year-on-year). This was mainly due to the sharp rise of wool price in September 2020 and the decline of 21q4 wool price.
Analysis and judgment:
In terms of splitting, based on the data in the interim report, we estimate that the revenue of wool fine spinning / wool top / modification treatment and dyeing and finishing processing / cashmere yarn in 2021 is about 2.1/5/1/800 billion yuan respectively, with a year-on-year increase of about 30% / 20% / 0% / 300%. Among them, the annual sales volume of wool fine spinning is about 15000 tons (8300 tons in the first half of the year), with a year-on-year increase of 53%, exceeding the company's plan of 13000 tons at the beginning of the year.
The net profit margin of 21q4 company was 5%, with a year-on-year and month on month decrease of 4pct. According to our analysis, the gross profit margin of 21q4 decreased mainly due to the decline of 21q4 wool price affected by the increase of rain (21q4 wool decreased by 2.4% month on month) and the growth of transportation cost.
Investment advice
We believe that (1) in the short term, the historical price center of wool is 1 Yihua Healthcare Co.Ltd(000150) 0 Australian cents / kg. The current round of wool price rose from 858 Australian cents / kg in September 2020 to 1468 Australian cents / kg in June 2021. Affected by the increase of rain in the second half of the year, wool price fell by 10% to 1319 Australian cents / kg in the short term. Since the end of the 21st year, there has been a new wave of rise, up to 1449 Australian cents / kg, Our analysis is mainly due to the continuous decline of sheep supply side for 18 years and the record low number of sheep in June 2020 (63.53 million), so we judge that the wool price still has room to rise compared with the high point of 2116 Australian cents / kg in 2018; (2) In the medium term, the production of the company's raised investment projects will drive the steady growth of the company's production capacity. Under the policy of production promotion, it is expected to double the company's market share. We estimate that the sales volume in 22 and 23 years is still expected to maintain a growth rate of 10-20%; In the long run, the company actively develops wool application fields (such as yoga clothes and home clothes), which is expected to increase the market demand scale of wool downstream. (3) In 2020, the company began to expand the category of cashmere yarn, which is expected to create the second growth curve. Considering that the performance is lower than our previous expectations, the revenue from 2021 to 2023 will be reduced from RMB 36 / 47 / 5.8 billion to RMB 34.7/42.8/5.11 billion, the net profit attributable to the parent company will be reduced from RMB 318 / 4.06/514 million to RMB 293 / 361 / 450 million, the EPS will be reduced from RMB 0.62/0.79/1 to RMB 0.57/0.71/0.88, and the closing price of RMB 6.03 on March 10, 2022 will be 11 / 9 / 7 times corresponding to PE respectively, maintaining the "buy" rating.
Risk tips
Risk of wool price decline; Risk that the price increase of products is less than expected; Risk of substitutes; The expansion of production is less than expected; Customer expansion is less than expected; Systemic risk.
