\u3000\u3 Shengda Resources Co.Ltd(000603) 719 Bestore Co.Ltd(603719) )
Event: in 2021, the company achieved revenue of 9.324 billion yuan, a year-on-year increase of + 18.11%, and net profit attributable to the parent company of 282 million yuan, a year-on-year increase of – 18.06%. Q4 achieved a revenue of 2.755 billion yuan in a single quarter, a year-on-year increase of + 16.53%, and the net profit attributable to the parent company was -34 million yuan, a year-on-year increase of -142.17%. The profit performance was lower than the market expectation.
The online layout has been strengthened, and the offline store expansion has been steadily promoted. The company continued to promote diversified channel layout. In 2021, the online / offline channel revenue was RMB 4.86 billion / 4.29 billion respectively, with a year-on-year increase of + 21.4% / 16.3%. 1) Online: online channels have been converted to fine operation, and the performance has maintained steady growth. In 21 years, the proportion of online in the main revenue has increased to 53.1% (a year-on-year increase of 1.1pct). Among them, the shaking platform increased layout, and tiktok revenue increased 3.62 times over the same period of 21 years. 2) Offline: the franchise / direct sales / group purchase business in 21 years was RMB 2.56/14.1/320 billion respectively, with a year-on-year increase of + 8.8% / 14.5% / 209%. By the end of 2021, the company had 2974 stores (a net increase of 273), and 204 stores in Q4, including 102 franchise stores / Direct stores. The company’s performance in the same store in 21 years has improved significantly compared with that in 20 years, and the optimization and adjustment of stores is coming to an end. In the next 22 years, we will accelerate the process of expanding stores and focus on improving the profitability of single stores.
Focus on market segments and optimize product structure. There were 1555 Omni channel SKUs in 21 years, including 565 new SKUs in 21 years. The company has a rich product line layout, focuses on the research and development of core categories, and pays attention to the needs of subdivided scenes / groups. The terminal sales of children’s snacks “snack Fairy” in 21 years reached 417 million yuan, a year-on-year increase of + 41.17%; The sales of pork shops exceeded 4.1 billion yuan year-on-year; The revenue of gift box category was + 72.1% year-on-year. In the next 22 years, the company will continue to strengthen product research and development, optimize product structure and improve overall profitability. Competitive strategy + channel structure adjustment, net interest rate under short-term pressure. In terms of gross profit, the gross profit margin of the company in 21q4 was 20.25%, a year-on-year decrease of about 7.80pct. After excluding the impact of transportation costs under the new income standard, the gross profit margin decreased by about 4.28pct year-on-year, mainly due to: 1) increasing resource investment online, increasing the proportion and reducing the gross profit margin (the proportion of Q4 online was about 55%, higher than that of the whole year); 2) The proportion of online gift box products with low gross profit increased; 3) The impact of local epidemic caused an increase in logistics costs (Q4 transportation rate increased by about 1.5pct year-on-year). In terms of period expenses, the Q4 sales expense rate was 15.27%. After reducing the impact of freight, it increased by more than 2pct year-on-year, mainly due to: 1) increased promotion under the online scale priority strategy; 2) the tiktok business with higher cost rate is increased. The rate of administrative expenses was 5.57%, a year-on-year decrease of 0.63pct. Overall, the net interest rate of 21q4 was – 1.22%, a year-on-year decrease of 4.6pct. We believe that the short-term pressure on the company’s profits is mainly due to the active adjustment of channel structure and competitive strategy, and the one-time investment cost is large. With the maturity of the following operational platform and optimization of the product structure, the profitability of the tiktok company is expected to recover in the next 22 years.
Profit forecast, valuation and rating: considering the strong investment of the company’s expenses, the net profit attributable to the parent company in 202223 was lowered to 362 / 440 million yuan (compared with the previous forecast of – 31.6% / – 28.2%), and the net profit attributable to the parent company in 2024 was increased to 515 million yuan. The corresponding EPS from 2022 to 2024 is 0.90/1.10/1.28 yuan, and the corresponding P / E of the current stock price is 32 / 26 / 23 times respectively. The company continues to promote the layout of all channels and categories, has certain competitive advantages, and maintains the “buy” rating.
Risk tip: the epidemic situation worsened, the cost of raw materials fluctuated, and the growth of subdivided brands did not meet expectations.
