\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 315 Shanghai Jahwa United Co.Ltd(600315) )
[key points of investment]
The company released the annual report of 2021, and the net profit attributable to the parent company was + 51% year-on-year. In 2021, the company achieved a revenue of 7.646 billion yuan, a year-on-year increase of + 8.7%; The net profit attributable to the parent company was 649 million yuan, a year-on-year increase of + 50.9%; Deduct the net profit not attributable to the parent company of RMB 676 million, a year-on-year increase of + 70.8%. Among them, single Q4 achieved a revenue of 1.816 billion yuan, a year-on-year increase of + 8.7%; The net profit attributable to the parent company was RMB 229 million, a year-on-year increase of + 93.8%. Under the influence of Tequ business adjustment and overseas business affected by the epidemic, the company’s annual performance growth rate is still bright, mainly due to the increase in the proportion of high gross profit skin care products business, which drives the overall gross profit margin to increase by 2.84pct to 58.7%. In 2021, the sales / management expense ratio was well controlled, from + 1.02pct / + 0.09pct to 38.54% / 10.34% year-on-year respectively.
The proportion of skin care products with high gross profit increased to the first, and the repurchase rate of key brands increased significantly. By category, the revenue of skincare / gehujiaqing / mother and baby / cooperative brands increased from + 22.2% / + 0.4% / + 4.2% / + 6.5% year-on-year to 26.97/24.10/21.58/373 million yuan, accounting for 35.3% (+ 3.9pct) / 32.6% / 28.3% / 4.9% of the main business income, and the gross profit margin was 71.2% / 55.1% / 51.1% / 57.6% respectively. The company adjusted its R & D methodology to improve the aggregation of new products, streamlined SKUs, focused on head products, and further optimized its operating efficiency. In 2021, the re purchase rates of baicaoji and Yuze were + 7.9pct / + 6.2pct to 41.6% / 42.6% respectively, and the user stickiness was significantly improved.
E-commerce layout, multi platform construction, department stores and CS profit improvement. From the perspective of different channels, the online / offline revenue increased by + 7.8% / + 9.3% year-on-year to RMB 3.210/4.428 billion respectively, accounting for 42.0% / 58.0% of the main business revenue respectively. Among them, in China’s online channels, the revenue of e-commerce / special channels is RMB 1.936 billion / 565 million respectively, which is expected to be + 20% / – 15% year-on-year respectively. E-commerce leads online growth through multi platform layout and strengthening self broadcasting; In China’s offline channels, the revenue of supermarkets / department stores / CS is RMB 2.541 billion / 4.73 billion / 330 million respectively, which is expected to be + 8% / + 40% / + 35% respectively year-on-year. The department store structure is optimized, and low-yield counters and stores are closed (111 are closed in 2021, and 866 are now available). After the epidemic, the CS channel continues to promote the reconstruction of traditional CS channel and the profit increase of Watson channel.
Upgrade business strategy, refine and improve organizational efficiency. The company adheres to the business strategy of “one center, two basic points and three boosters”, takes consumers as the center, adheres to brand innovation and channel upgrading, and focuses on culture, system process and digitization. Under brand innovation, we will continue to promote the brand R & D PMO model and share KPIs. The aggregation of head products of the whole brand will rise from 56% in 2019 to 71% in 2021. In 2021, the company’s operating quality was effectively improved. The days of inventory turnover were – 15 days to 99 days year-on-year, the days of accounts receivable turnover were – 8 days to 52 days year-on-year, and the net operating cash flow was + 54.3% to 993 million yuan year-on-year.
[investment suggestions]
We believe that based on the accumulation of a century of history and under the “123” business strategy, the company is expected to achieve continuous improvement in profitability through brand upgrading, channel upgrading and efficiency optimization. Due to the impact of the epidemic on offline channels and overseas businesses, we lowered our forecast for the company’s revenue and net profit attributable to the parent company in 2022. It is estimated that the company’s operating revenue will be RMB 86.18/96.30/10.743 billion from 2022 to 2024, with a year-on-year growth rate of 12.71% / 11.75% / 11.55% respectively; The net profit attributable to the parent company was 805 / 1016 / 1267 million yuan respectively, with a year-on-year growth rate of 23.93% / 26.28% / 24.72% respectively; EPS is 1.18/1.50/1.86 yuan / share respectively, and the corresponding PE is 31 / 25 / 20 times respectively, maintaining the “overweight” rating.
[risk tips]
The epidemic affects the consumption boom;
New product sales are less than expected;
Industry competition intensifies.
