\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 79 Huali Industrial Group Company Limited(300979) )
Core view
Event: the company released the annual performance express of 2021. In 2021, the annual operating revenue reached 17.47 billion yuan, a year-on-year increase of 25.4%; The net profit attributable to the parent company was 2.768 billion yuan, a year-on-year increase of 47.34%; The net profit deducted from non parent company was 2.761 billion yuan, with a year-on-year increase of 47.21%.
Comments:
Performance growth was faster than revenue growth, and 21q4 continued its beautiful growth. The company has strong development ability. It has expanded production capacity through new construction and expansion of factories and lean production, and obtained high-quality orders from brand customers. In 2021, the company’s gross profit margin increased compared with previous years. We believe that it is mainly due to: (1) capacity climbing and scale effect; (2) Optimize the structure of products and customers and expand the profit space; (3) The sales price with major customers is determined through cost negotiation. The transmission ability of cost rise is strong. In 2021, the growth rate of the company’s performance is faster than that of revenue, and the net interest rate reaches 15.8%. In a single quarter, the company achieved a revenue of 4.835 billion yuan in 21q4, a year-on-year increase of 33.46%; The net profit attributable to the parent company was 771 million yuan, with a year-on-year increase of 37.39%, and the growth rate of revenue and net profit increased month on month.
High quality large customers have strong orders, and the potential of new customers can be expected. The company has diversified customer structure and high concentration. In 2021, the company’s revenue from major customers increased significantly. From the first three quarters of 2021, the revenue from Nike / Deckers / VF / puma / UA increased by 49.2% / 57.7% / 9.4% / 23.7% / 69.5% respectively (excluding the influence of exchange rate). The orders of the first two major customers increased strongly, and the cooperation between new customers underarmour in 2018 was promoted rapidly. With the in-depth cooperation between the company and core customers such as Nike, the performance is expected to maintain rapid growth. In 2021, the company’s orders from new customers ASICs, on and NewBalance have been mass produced and shipped. The new customers are international well-known brands in the field of running shoes, which is expected to become a new driving force for the company’s development in the future.
Production capacity expansion is advancing steadily, and there is a large space for North Vietnam to expand production. Q1-q3 company sold 153 million pairs of sports shoes in 2021. According to the calculation of revenue, the annual sales of sports shoes is expected to exceed 200 million pairs. The company’s epidemic prevention and control is good, and the North Vietnam plant maintains stable operation. In 2022, North Vietnam is expected to continue to realize production capacity through new plants, expansion of old plants and efficiency improvement. At the same time, the company has steadily promoted the phase I project in Indonesia, and the project is expected to contribute production capacity in 2022.
Investment suggestion: the sports shoes market continues to boom. Relying on the core advantages of product development, the company grasps high-quality customer resources, accelerates the layout of production capacity, and helps the rapid growth of performance. Taking into account the company’s capacity expansion progress, we fine tune the company’s profit forecast. It is estimated that the net profit attributable to the parent company in 2022 / 2023 will be 3.55/4.306 billion yuan (the original forecast value was 3.547/4.303 billion yuan), corresponding to 28 / 23 times of the current market value PE respectively, maintaining the “buy” rating.
Risk tip: the cost of raw materials fluctuates sharply, and the global “covid-19” epidemic repeatedly affects end consumption.
