\u3000\u3 China Vanke Co.Ltd(000002) 444 Hangzhou Great Star Industrial Co.Ltd(002444) )
Event: the United States resumed the exemption of import tariffs on some Chinese goods on March 23, involving 352 of the previous 549 pending products.
Sino US trade friction shows signs of easing; This exemption involves some products such as the company’s lockers
According to the disclosure of interactive easy platform, among the exempted commodities restored this time, those involving Hangzhou Great Star Industrial Co.Ltd(002444) mainly include some furniture supplies, such as lockers, hat racks, hat hooks, brackets and similar products; Led portable lamp and working lamp; Electrical tape and other special products; Small vacuum cleaners and other commodities. Recently, there has been frequent interaction between China and the United States. Combined with the recent victory of Zte Corporation(000063) and the implementation of tariff exemption for some Chinese goods, we believe that there are signs of easing Sino US trade frictions.
If the Sino US trade relations are gradually eased and the exemption strength is increased, the company’s future performance will be more flexible. If the Sino US trade relations are eased and the exemption scope is further increased, the company’s performance will have greater upward flexibility.
Scenario 12022: it is estimated that the revenue of storage containers in 2021 will be about 1 billion yuan. If the profitability in 2021 continues in 2022, it is estimated that the impact of partial exemption on the performance in 2022 will be about 7%;
Scenario 2: all exemptions in 2022: Based on the company’s export to the United States of US $1.1 billion in 2021, FOB business accounting for 70% and bearing 8% tariff, private brand business accounting for 30% and bearing all 25% tariff, it is expected that the total tariff friction cost to the company will exceed US $100 million and affect the performance of 2022 by about 30%.
In 2021, the main business revenue increased by more than 30%. Under the industry clearing pattern, the company is expected to continue to improve the market share
It is estimated that the company’s revenue will exceed 10 billion yuan in 2021, with a year-on-year increase of about 17%. The main business grew by more than 30%. According to the company’s income of personal protective equipment (PPE) such as masks in 2020 of about 1.143 billion yuan, excluding the calculation, the main business income in 2020 is about 7.4 billion yuan, and the main business income in 2021 is expected to reach 9.6 billion yuan. We believe that due to the impact of costs, the industry is further cleared, and the company is expected to continue to increase its market share by virtue of its own advantages in supply chain, R & D and channel management.
The expansion of the three business segments has made steady progress and is expected to maintain high growth in 2022!
1) tools business: power tools are expected to take over and achieve more than $200 million in revenue in 2021.
2) laser measuring instruments: expand categories and optimize sales channels, with a year-on-year increase of more than 100% in 2021.
3) storage containers: the European epidemic recovered, and the US market received new orders from customers, with a year-on-year increase of 62% in 2021h1. Keelung, a newly acquired storage container company, joined the consolidation in July, which is expected to make the company the largest storage container company in the world.
Profit forecast
Regardless of exemption and other factors, it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 14 / 17 / 2 billion respectively, with a year-on-year increase of 2% / 27% / 15%, corresponding to P / E15 / 12 / 10x. As the leader of hand tools in China, under the background of industry clearing, the market share of the company is expected to gradually increase and maintain the “buy” rating of the company.
Risk tips
1) price fluctuation of raw materials; 2) The shipping situation continues to deteriorate; 3) Repeated outbreaks; 4) The development of power tools is less than expected;
