\u3000\u3 Shengda Resources Co.Ltd(000603) 833 Oppein Home Group Inc(603833) )
Summary of the report:
Since 2018, the compound growth rate of the company's performance has led the industry, and its market share has continued to increase Oppein Home Group Inc(603833) as the absolute leader of the home furnishing industry, from 2018 to 2021 (measured by the performance forecast center), the revenue and net profit achieved a compound growth rate of 21% and 20% respectively, and the average weighted roe and net interest rate were 21% and 14% respectively, leading the industry in financial performance. According to the forecast data, the penetration rate of customized real estate companies in the central industry will continue to increase from RMB 25.0 billion in 2016 to RMB 25.0 billion in 2021, accounting for nearly 2% of the total sales rate of the central real estate industry in 2021. The steady and excellent operation quality also makes the company recognized by the capital market, and the valuation level is higher than the industry average 5x ~ 10x.
Comparison with 2018: at present, the company's valuation has fallen to an all-time low. From March 1 to 16, the company's share price fell by 14% in total. Based on the closing price on March 16, 2022 and our estimated net profit of 3.233 billion yuan in 2022, the current share price corresponds to 20.5x PE in 2022, which is close to the valuation level of 19x at the historical bottom of Q4 in 2018.
Compared with 2018: Alpha's strength continues to be realized, and the performance expectation is still stable. According to the company's performance forecast, the operating revenue is expected to be 19.899-21.373 billion yuan in 2021, with a year-on-year increase of 35% - 45%; In 2021, the net profit attributable to the parent company was 2.640-2.846 billion yuan, with a year-on-year increase of 28% - 38%. If calculated by the forecast center, the growth rate of income and net profit in 21 years is expected to be 40% and 33% respectively, and the growth rate of income and net profit in 21q4 is expected to be 24% and 3% respectively. Considering the high net interest rate base of 21q1, the market is worried that the company's performance growth will face great pressure. We believe that compared with 18q3-q4, the company's revenue growth rate is 10.7% and 18% respectively, and the net profit growth rate is 22.6% and 4.5% respectively. At the current time point, the bottom of the performance growth rate may have appeared for three reasons: 1) on the revenue side, according to our profit forecast for each business segment, the revenue growth rate is expected to be 20.9% and 17.3% from 2022 to 2023 respectively, The quarterly revenue distribution characteristics of customized enterprises are significant. We expect that the revenue of 22q1-q2 is still expected to continue the steady growth trend; 2) Gross profit margin, the impact of expected changes is controllable. According to our sensitivity analysis on the gross profit margin of the company's cabinet and clothing, the results show that assuming that the gross profit margin of household products business remains at a low level of 20%, the gross profit margin of cabinet and clothing in 22 years is reduced by 1PCT and 1.5pct respectively, corresponding to the comprehensive gross profit margin of 22 years is reduced by 1.3pct; The pessimistic assumption is that the gross profit margin of cabinets and clothes in 22 years has decreased by 2cpt, corresponding to the comprehensive gross profit margin in 22 years has decreased by 1.9pct. 3) Cost rate: with the change of the company's business structure in recent years, the scale effect of the cost side is significant. In recent years, the cost rate of the company has decreased by 1.3pct ~ 2.5pct per year. It is expected that the annual cost side savings are expected to alleviate the impact of the change of gross profit margin to a certain extent.
Optimistic about the accelerated improvement of leading shares, and the bottom of valuation indicates value allocation opportunities Oppein Home Group Inc(603833) for the innovation and iteration ability of business model, the company is leading the industry. In recent years, the company has successfully built a leading position in the two core categories of overall cabinet and whole house customization, superimposed the core advantages of marketing, manufacturing and channel, and actively promoted the upgrading of big home strategy. We believe that there is little difference in the products of the customized home furnishing industry. The company is rapidly building a channel moat by using the phased low gross profit business. In the long run, it is expected to further strengthen the "European style" brand effect and accelerate the improvement of market share. It is estimated that the company's net profit attributable to the parent company from 2021 to 2023 will be RMB 2.743 billion, RMB 3.233 billion and RMB 3.769 billion respectively, with a year-on-year increase of 33%, 17.9% and 16.6% respectively. At present, the stock price corresponds to the PE of 2022, which is 20.5x. The valuation bottom is superimposed with the expectation of stable performance trend, indicating the company's long-term allocation value and covering the "buy" rating for the first time.
Risk factors: the risk of sharp decline in real estate sales and sharp rise in raw material costs
