\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 24 Shenzhen Crastal Technology Co.Ltd(300824) )
The company disclosed 2021 annual report:
For the whole year of 2021: the income is 850 million (YoY + 21%), the parent is 110 million (YoY + 8%), and the deduction is 100 million (YoY + 12%). Corresponding to Q4: the income is 300 million (YoY + 17%), the parent is 40 million (YoY + 23%), and the deduction is 40 million (YoY + 38%). Dividend: the company plans to distribute a cash dividend of 2.50 yuan (including tax) for every 10 shares to all shareholders and increase 5 shares for every 10 shares to all shareholders with capital reserve.
In addition, the company issued the draft of equity incentive in 2022.
Revenue side: independent growth of domestic sales
By independent brand / OEM:
① independent brands: the revenue in 2021 is 630 million (YoY + 26%), of which:
China’s independent: 570 million (YoY + 22%) in the whole year, and 210 million (YoY + 28%) in Q4;
Overseas autonomy: 60 million (YoY + 96%) in the whole year, and 20 million (YoY + 59%) in Q4.
In 2021, the kitchen small electricity industry as a whole was under pressure under a high base. According to orvey’s sampling statistics, the retail scale of the kitchen small electricity industry was yoy-14%. Over the same period, Beiding still maintained a 22% growth rate of Chinese brands, which is much better than the industry as a whole, mainly due to:
(1) effective expansion of non electricity categories (year-on-year + 10% for electrical appliances in private brands and + 93% for non electricity);
(2) the prosperity of medium and high-end is better than that of the industry as a whole;
(3) steamer makes a popular style (single category + 76%).
② OEM: 220 million (YoY + 8%) in the whole year, and 70 million (yoy-12%) in Q4. Generally speaking, the company’s OEM business is in a shrinking trend, and it is expected that the focus of future development will still be independent brands.
Profit side: Q4 profit improved year-on-year
Gross profit margin: the annual gross profit margin of 2021 is 49% (yoy-2pct), and the gross profit margin of Q4 is 50% (YoY + 3PCT). Q4 gross profit margin has rebounded, mainly because ① the cost base of raw materials last year has been at a relatively high level; ② The company gradually digests the cost pressure through OEM and re negotiation. Changes in gross profit margin by business: independent domestic sales: the gross profit margin for the whole year was 62% (yoy-1.1pct). China’s high-end profitability is less impacted by costs. Overseas autonomy: gross profit margin 41% (yoy-20pct). After the freight is included in the cost, the increase of shipping price has a significant impact on the gross profit margin. OEM: gross profit margin 18% (yoy-4.3pct). After bargaining again in the second half of the year, the profit was repaired (the gross profit margin of 21h1 / H2 OEM was 14% / 20% respectively).
Expense rate: the period expense rate is 38% (YoY + 1.35pct). Among them, the sales expense rate is 26% (YoY + 1.7pct), the management expense rate is 8.1% (yoy-0.05pct), the R & D expense rate is 3.6% (yoy-0.14pct), and the financial expense rate is 0.6% (yoy-0.15pct). The sales expense rate increased due to the increase of the proportion of independent brands, and the other expense rates remained basically stable.
Net interest rate: the annual net interest rate of 2021 is 13% (yoy-1.5pct), and the net interest rate of Q4 is 13% (YoY + 0.7pct).
Equity incentive: the assessment objective is relatively mild
Announcement of the company: it is proposed to grant 2.48 million restricted shares to 71 directors, supervisors and key employees (accounting for 1.14% of the total share capital).
Grant price: 7.7 yuan (closing price on announcement day: 14.7 yuan)
Source: repurchase or private placement
Goal: relatively mild. Based on 21 years, the revenue of independent brands will increase by 15% / 30% / 45% / 60% (CAGR about 12.5%) in 22-25 years, and the overall profit will increase by 10% / 20% / 30% / 40% (CAGR about 9%). Cost impact: small. The total cost of the company is expected to be 14 million, which will be amortized in the next five years. We expect that the impact on the 22-25 year rate will not exceed 0.55%.
We believe that the incentive number covers a relatively wide range and the assessment objectives are relatively mild. It is expected that the main purpose is to strengthen the shareholding scale of the core team and ensure the stability of the team.
Business tracking: see the expansion of categories in China and Western categories overseas
China: continue to pay attention to the progress of category expansion.
In 2021, the company’s domestic sales still achieved good growth under the pressure of the industry. The main sources of growth are:
① coverage of new scenes, such as coffee scene.
② coverage of supporting products, such as the renewal of pig boxes and large stew cups supporting steaming stew pots, tea drinks and other categories.
③ the upgrading of the original products, such as health pot K31, extends the family health pot to the single and commercial scene. However, looking back on 2021, the company did not promote innovation in electrical appliances. The company’s positioning is high-end, and the pace of product promotion is more cautious than other small household appliance companies. However, for the current companies operating in short categories, once the effective expansion of categories is realized, it will greatly stimulate the income. It is suggested to continue to pay attention to the progress of the company in electrical appliances.
Overseas: turn to Western-style products such as toaster.
Previously, the company’s overseas main sales SKU were similar to those in China, mainly Chinese small household appliances such as health pots, implicitly targeting overseas Chinese. In 2021, the company began to change its thinking and launched Western-style small household appliances such as toaster and coffee maker to expand its overseas and local customers. Due to the previous years of working experience, the company has rich experience in manufacturing Western-style small household appliances and quickly realizes high-quality switching. At present, the company’s toast furnace has reached the top 15 level in Amazon’s sales ranking. We can look forward to the further expansion of Western-style categories in the future.
Investment suggestion: buy rating
Revenue side: after the base number of domestic sales drops in 2022, the industry pressure is expected to decrease. If the company further realizes effective expansion in categories and products, it is expected that domestic sales will maintain a good growth rate; Overseas is still in the development stage, and the supplement of SKU is expected to bring rapid growth of income. Profit side: the pressure is gradually digested, and Q4 net interest rate has turned to positive year-on-year growth.
Under the short-term cost factor, the profit forecast is adjusted. It is estimated that the profit of 22-23 years is 140 million and 180 million (the previous value is 160 million and 230 million), yoy + 28% and + 31%, corresponding to pe23 and 18x. Maintain buy rating.
Risk tips
The promotion of innovation was less than expected, the industry boom was less than expected, the pressure on raw materials / shipping / exchange rate increased, and the growth of original categories slowed down
