\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 24 Shenzhen Crastal Technology Co.Ltd(300824) )
Key investment points
Independent brands continue to be sold in large quantities, and overseas business performance is outstanding
In 2021, the company’s independent brand and OEM / ODM business revenue were 632 million yuan (year-on-year + 26.15%) and 214 million yuan (year-on-year + 7.50%) respectively, and the proportion of independent brand business revenue increased to 74.64% (+ 3.14 PCT). Among independent brands, 1) sub business: electrical business increased by + 10.11% to 444 million yuan year-on-year, and the business income of supplies and food materials increased significantly, from + 92.56% to 188 million yuan year-on-year. 2) sub regions: Chinese mainland revenue increased from +21.72% to 573 million yuan, and overseas income was +95.63% to 59 million yuan over the same period.
The independent brand revenue of single Q4 company was RMB 237 million (year-on-year + 28.28%), and the OEM / ODM business revenue was RMB 66 million (year-on-year – 11.91%). In terms of specific split, the revenue of independent brands: 1) sub business: the revenue of 21q4 electrical appliance business was 167 million yuan (year-on-year + 10.80%), and the business of supplies and food materials grew rapidly, realizing a revenue of 70 million yuan (year-on-year + 105.58%). 2) sub regions: 21Q4’s independent brand in Chinese Mainland / overseas revenue increased by 25.60%/58.97% to 2.14/0.24 billion over the same period.
The annual gross profit margin was under pressure due to the rise of raw material prices and sea freight, and Q4 profitability was repaired year-on-year
Affected by the company’s price of raw materials and the year-on-year increase in the gross profit rate to -981.45% in 2021; In 2021, the company’s expense rate was + 1.35pct year-on-year, mainly due to the company’s online mall and offline brand cultivation and the expansion of self operated stores, resulting in a sales expense rate of + 1.69pct. Under the comprehensive influence, the net profit margin of the company in 2021 was -1.51pct year-on-year.
From Q4 alone, the company’s profitability increased year-on-year. The proportion of independent brand business of 21q4 company increased by 7.08pct, and the proportion of OEM business income with low gross profit margin decreased, which promoted the overall gross profit margin to + 3.37pct to 50.08% year-on-year. The company’s expense rate during the period was + 3.18pct year-on-year, of which the sales expense rate was + 5.37pct. We expect that it is mainly due to the impact of channel expansion. Under the comprehensive influence, the net interest rate rose from + 0.71pct to 13.10% year-on-year.
The company issued the equity incentive plan for 2022, and the income of independent brands was taken as one of the assessment indicators
The company issued the 2022 equity incentive plan (Draft), which plans to grant 2481000 restricted shares, accounting for 1.1412% of the total share capital, with the grant price of 7.70 yuan / share. The incentive objects include 71 core managers such as general manager and deputy general manager and business and technical backbone. The performance assessment target is that the operating revenue of independent brands from 2022 to 2025 is + 15% / + 30% / + 45% / + 60% respectively compared with 2021 (corresponding to CAGR is 12.47%), and the net profit is + 10% / + 20% / + 30% / + 40% respectively compared with 2021 (corresponding to CAGR is 8.78%).
Profit forecast and valuation
The proportion of the company’s own brand business has increased, the brand has a beautiful performance at sea, the channel construction has been steadily promoted, and the performance is expected to continue in large quantities. We estimate that the operating revenue of the company from 2022 to 2024 will be 1.049 billion yuan, 1.233 billion yuan and 1.448 billion yuan respectively, with a year-on-year increase of 23.91%, 17.52% and 17.37% respectively; The net profit attributable to the parent company was 134, 169 and 207 million yuan respectively, with a year-on-year increase of 23.67%, 26.20% and 22.09% respectively. The EPS was 0.62, 0.78 and 0.95 yuan / share respectively, corresponding to the current share price PE of 26.70x, 21.16x and 17.33x respectively, maintaining the rating of “overweight”.
Risk tips
Intensified market competition, sharp rise in raw material prices and sea freight, etc.
