\u3000\u3 Shengda Resources Co.Ltd(000603) 558 Zhejiang Jasan Holding Group Co.Ltd(603558) )
According to the company's announcement, the income from January to February is + 38%. The company released the business data announcement from January to February 2022: 1) the revenue was 355 million yuan, a year-on-year increase of 38%; The performance was 48 million yuan, a year-on-year increase of 137%. 2) In terms of profit quality, we estimate that the company's net profit margin from January to February is about 13.5%, which is improved from Q1 to Q3 of last year. At the same time, with the company's seamless capacity utilization returning to normal, we judge that the profit quality level of seamless business has also improved. 3) Previously, the company issued a performance forecast, and it is expected that the performance in 2021 will be 160210 million yuan (the amortization of share based payment expenses will affect the performance by 40 million yuan).
Seamless business has gone through an inflection point and cotton socks have grown steadily. 1) The cotton socks business grew steadily. With the recovery of overseas customer sales, we judge that there are abundant orders for cotton socks. According to the usual business proportion, orders and production rhythm, we estimate that the sales of cotton socks from January to February are about 230 million, and it is expected that Q1 cotton socks will achieve steady growth. 2) New customers of seamless business continued to expand. We judged that the capacity utilization rate was restored, so the sales increased rapidly. As the company expands high-quality new customers such as HM and Li Ning, according to our tracking, the current capacity utilization of seamless business is good. According to the usual business proportion and the improvement of seamless capacity utilization, we estimate that the company's seamless sales from January to February are about 120 million. We expect the growth of Q1 seamless performance to grow at a high speed.
Continuous capacity expansion drives performance. 1) We judge that the company's short-term production capacity has been relatively stable.
From the end of June 2021, the epidemic broke out in some areas of Vietnam and continued to fluctuate. The follow-up Vietnam policy was gradually liberalized. According to the location of production capacity, the company's Vietnam factory is basically operating normally. 2) Scale expansion and industrial chain extension. ① Production capacity expansion of cotton socks: under the control of the epidemic, we expect the production capacity of cotton socks to be about 3.5/3.9/460 million pairs from 2021 to 2023, which is expected to continue to drive orders. ② Seamlessly optimize the production capacity layout. Under the epidemic, Vietnam originally planned to temporarily move the new production capacity to Guizhou, China. We expect that the production capacity of China / Vietnam in the previous seamless business accounted for 80% / 20%. ③ Extending the industrial chain upstream, according to the company's announcement, Guizhou auxiliary material project has been put into operation, which is expected to provide good coordination for the main industry.
The annual performance recovered. 1) Looking forward to the whole year, the company has abundant orders. According to the rhythm of production capacity, we expect the double-digit growth of cotton socks in the whole year, and seamless is expected to usher in rapid growth. 2) The Company repurchased shares to protect the interests of investors. As of March 8, the company had repurchased 2.49% of the total share capital and paid nearly 100 million yuan (the total scale of planned repurchases is no more than 200 million yuan and no less than 100 million yuan). 3) Recently, the company announced that its subsidiary Qiao Er Tingting and its holding subsidiary Guizhou Dingsheng won the certificate of high tech enterprise (enjoy 15% preferential income tax rate within 3 years), highlighting the company's innovation and technological strength.
Investment advice. It is a leading manufacturer of knitted apparel with integrated production chain. We expect that the net profit attributable to the parent company from 2021 to 2023 will be RMB 190 / 3.0 / 360 million respectively, and the current profit will be RMB 11.26, corresponding to 15 times of PE in 2022, maintaining the "buy" rating.
Risk warning: the impact of covid-19 epidemic exceeded expectations, and the epidemic situation in Southeast Asia was repeated; Risk of abnormal fluctuation of exchange rate; Risk of policy change in Vietnam; Customer order transfer risk
