\u3000\u3 Shengda Resources Co.Ltd(000603) 195 Gongniu Group Co.Ltd(603195) )
Event overview
Gongniu Group Co.Ltd(603195) released the performance express for 2021: in 2021, the company achieved a revenue of 12.422 billion yuan, a year-on-year increase of + 23.59%; The net profit attributable to the parent company was 2.813 billion yuan, a year-on-year increase of + 21.59%; The net profit attributable to the parent company after deduction was RMB 2.672 billion, a year-on-year increase of + 20.27%. Quarter by quarter, Q4 achieved a revenue of 3.409 billion yuan in a single quarter, a year-on-year increase of + 17.40%; The net profit attributable to the parent company was 607 million yuan, a year-on-year increase of - 15.09%; The net profit attributable to the parent company after deduction was 576 million yuan, a year-on-year increase of - 14.18%. Q4 single quarter revenue hit another record high, while the profit side fell year-on-year under the influence of a variety of factors such as the high base in the same period of last year and the rise of raw material prices.
Analysis and judgment:
Q4 revenue hit another record high, and the growth rate improved significantly month on month.
The absolute amount of the company's revenue in 2021q4 single quarter hit another record high, and the revenue growth rate was 17.40% (21q1 + 86.57%, 21q2 + 18.93%, 21q3 + 5.08%) under the background of high base in the same period of last year. The revenue growth rate improved significantly month on month, mainly due to the steady growth of the company's traditional converter, wall opening and other businesses around the two major tracks of new energy and intelligent ecology, Accelerate the layout of new businesses, continuously accelerate product innovation for the pain points of customers in many fields such as home furnishings and new energy vehicles, and successively list high-quality new categories such as new energy charging gun / pile, intelligent lock and intelligent clothes dryer, which has achieved a good development momentum; In addition, the company has increased its support for high potential businesses such as digital accessories, continued to promote the diversified development of channels, improved the operation quality of terminal outlets and launched e-commerce channels.
Raw materials rose and the profit side was under short-term pressure.
In 2021q4, the net profit margin attributable to the parent company was 17.79%, with a year-on-year ratio of -6.81pct and a month on month ratio of -6.79pct. The profitability decreased. We expect that the main reasons are: 1) the impact of the sharp rise in the price of raw materials. The company's direct materials account for about 80% of the total cost, and the main raw materials include copper, plastics, components, hardware, packaging materials, electronic parts, etc. according to the company's prospectus, the purchase amount of plastic, copper, hardware and other main raw materials accounted for about 22.39%, 11.25% and 12.30% of the total purchase in the first half of 2019. In 2021q4, although the price of plastics has been corrected, it remains high, while the price of copper basically remains high, and the pressure on the cost side is relatively large; 2) The impact of changes in product structure on profitability. The company has accelerated the launch of high-quality new products in many fields such as home furnishings and new energy vehicles. At present, new products are still in the investment period, with small sales scale and profitability lower than traditional core products; 3) Other expense side impacts. With the rapid development of new business and the optimization of terminal stores, the sales expense investment is expected to increase.
The adverse factors on the short-term cost side have been alleviated, and the leading civil electrician in the medium and long term has moved forward steadily.
In the short term, according to wind, the price of plastics in 2021q1 (taking the price index of China Plastics City as an example) was - 4.67% month on month and + 23.09% year-on-year; The price of copper (taking the copper price index as an example) was - 0.21% month on month and + 13.73% year on year. The price of raw materials was still high year on year. However, the price of main raw materials such as plastics and copper decreased month on month, and the adverse factors on the short-term cost side were alleviated. In addition, the company continued to improve the lean operation level of the whole value chain and adopted hedging to lock the price of bulk materials, which helped to alleviate the pressure on the cost side to a certain extent. In the medium and long term, the company adheres to the development concept of "professional focus, only the first and go a long way". The three tracks of electrical connection, intelligent electrical lighting and digital accessories keep pace. Through multiple categories and channels, the company gradually moves forward to a civil electrical giant, opens up the growth space of the company and can develop in the future.
Investment advice
On the basis of consolidating the field of converters, the company has successively copied its competitive advantages to new business fields such as wall opening, LED lighting and digital accessories, and gradually moved forward to a civil electrical giant. Considering the pressure on the company's cost side and the increase of new business development expenses, the previous profit forecast is lowered. It is expected that the operating revenue will be reduced from 15.144/17.727 billion yuan to 14.898/17.433 billion yuan respectively from 2022 to 2023, and the EPS will be reduced from 6.19/7.26 yuan to 5.53/6.46 yuan respectively. According to the closing price of 137.15 yuan / share on March 11, 2022, the corresponding PE will be 25 / 21 times respectively, Continue to be optimistic about the strong moat built by the company's "brand power + channel power + management power" and maintain the "buy" rating.
Risk tips
New business expansion is less than expected risk; Risk of substantial price increase of raw materials; The risk of intensified industry competition; The prosperity of real estate is less than the expected risk.
