\u3000\u3 Shengda Resources Co.Ltd(000603) 187 Qingdao Hiron Commercial Cold Chain Co.Ltd(603187) )
In 2021, the price rise pressure of raw materials of the company is not high. The gross profit margin of the company declined significantly in 2021, which seems to have a great impact on the price rise of raw materials, but the increase of raw materials this time is far less than that in 20172018. In 2017, the gross profit margin of the company’s commercial display cabinet products was 34.3%, a year-on-year decrease of 3.8pct. From the perspective of average price, it was 1905 yuan / set in 2017, a year-on-year increase of 118.7 yuan / set, and the cost of a single set increased by 171 yuan / set, mainly due to the large increase of raw materials (+ 167.9 yuan / set). From the perspective of raw material unit price, the unit price of the top five raw materials shows an upward trend. The largest increase is isocyanate (+ 88.4%), followed by steel sector (+ 37.2%), glass door (+ 18.2%), combined polyether (+ 6.6%) and compressor (+ 1.9%). It will be found that the compressor cost accounting for the highest cost of the company has the smallest increase, which is related to the domestic substitution trend, which has always existed. In 2018, the average price of the company’s commercial display cabinet products was 2059 yuan, yoy + 8.1%, while the cost of a single set was 1446 yuan / set, yoy + 10.3%, resulting in a decrease in the gross profit margin of the company’s commercial display cabinet from 31.2% to 29.8%, but the freezer realized a slight increase, and the refrigerator decreased by 5pct year-on-year. From the data of 2021q1-q3, the price of compressor decreased from 217 yuan / set in 2020 to 200 yuan / set (- 7.8%), the largest increase was the combination polyether (+ 26.7%), the second increase was steel sector (+ 23.7%), and the pressure of raw materials was much lower than that in 2017.
In 2021, the pressure of gross profit margin of freezer comes from short-term profit transfer to key customers. From 2021q1 to Q3, the average price of the company’s freezer is 1817 yuan / set, a decrease of 177 yuan / set compared with 2020, resulting in the company’s gross profit margin from 33.0% to 24.1%, which is mainly related to the signing of volume for price contracts between the company and key customers. The company’s products have an obvious trend of large-scale and customization, so the average price of the company’s freezers rarely reduced. From 2015 to 2020, the compound growth rate of the average price of the company’s freezers reached 3.3%. Assuming that the average price returns to the 2020 level, the gross profit margin of the company’s freezer will be 30.8% (yoy-2.2pct). Assuming that the average price increases by 1.6%, the gross profit margin will be 31.9% (yoy-1.1pct). Assuming that the average price increases by 3.3%, the gross profit margin will reach 33.1%, which is equivalent to that in 2020. The cooperation strategy between the company and the above major customers has a certain pressure on the average price of the company’s products in the short term, but the price of products of other customers of the company can be increased, and new products are constantly emerging, which gradually weakens the impact.
The gross profit margin of refrigerators has improved in 2021, the most stressful stage has passed, and the dividend of large-scale production expansion is coming. 2021q1-q3 company’s gross profit margin of refrigeration is 15.4%, which is 0.9pct higher than that in 2020. This is realized under the background of high cost side pressure. If the cost side pressure is excluded, the gross profit margin of refrigeration cabinet may be nearly 20%, exceeding the performance in 20182020. In 2017, the company returned to China and began to expand the refrigeration market. Considering the high pressure in the early stage of Chinese market expansion, the gross profit margin of refrigeration cabinet business of the company shows a downward trend. After the vigorous expansion from 2018 to 2021, the expansion of the company’s leading customers in the refrigeration field has been basically completed, and the time period with the greatest pressure on the company’s refrigerated cabinet business has passed, which may also be the confidence of the company to increase the production capacity of 1 million refrigerated cabinets this time.
Investment suggestion: considering the future growth of the company, it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 240 / 370 / 510 million yuan respectively, and the corresponding valuation will be 30x / 20x / 15x respectively, maintaining the “recommended” rating.
Risk tips: 1) the risk that the price of raw materials will continue to rise; 2) The risk that the epidemic affects offline demand and leads to the slowdown of the company’s demand; 3) The project construction progress is lower than the expected risk.
