\u3000\u3 Shengda Resources Co.Ltd(000603) 818 Qumei Home Furnishings Group Co.Ltd(603818) )
Event: on March 28, Qumei Home Furnishings Group Co.Ltd(603818) released the announcement of main business data from January to February 2022. According to the preliminary accounting of the company, from January to February 2022, the company achieved an operating revenue of about 825 million yuan, an increase of about 21% year-on-year; The net profit attributable to the parent company was about 44 million yuan, with a year-on-year increase of about 85%.
From January to February of the year, the company achieved high performance growth, and the fundamentals maintained a rising trend. In the face of repeated epidemics and the uncertainty of the economic environment, the company overcame difficulties, solidly promoted various work, and the overall operation of the company improved and maintained a good growth trend. Benefiting from the steady development of Qumei’s business in China and the continuous expansion of overseas Ekornes, the company’s operating revenue and net profit attributable to the parent company increased by about 21% and 85% year-on-year respectively from January to February 2022, and the fundamentals maintained a recovery trend.
The growth rate of new orders introduced by ekoses and other subsidiaries exceeded 70% year-on-year, driven by the introduction of new orders by ekoses and other subsidiaries in 2021rnes, which continued to grow by more than 90% year-on-year. Driven by new products, the revenue contribution rate of sofa, electric comfort chair and dining table chair products continued to grow; Key customer business continued to make breakthroughs, with 8 new customers entering the list of top 20 customers of stressless and img brands respectively. By the end of June 2021, the cumulative order amount of Ekornes in 2021 had reached 2.574 billion NOK, a year-on-year increase of 65%.
Ekornes’ brands have a strong momentum of development, including: 1) stressless is distributed in key cities with a three-level channel system of brand stores, flagship stores and traffic stores; 2) The IMG channel structure has been continuously optimized, and the sales revenue of online channels and non Qumei system has increased rapidly. With the increase in the number of img brand independent stores and the alleviation of shipping problems, IMG China market is expected to accelerate the volume. The introduction of head combat investment such as Hillhouse adds new impetus to the development of Ekornes. On December 30, 2021, the board of directors of the company reviewed and approved the letter of intent for strategic cooperation investment. Hillhouse investment and Yinti consulting plan to invest RMB 200 million and US $25 million respectively by increasing capital or acquiring old shares from qumeirunto, a wholly-owned subsidiary. Qumeirunto is a special purpose company established when acquiring ekonres as. The introduction of strategic investors Gaoling and Yinti consulting is expected to reduce the total scale of the company’s interest bearing liabilities, optimize the asset structure, and further enable the long-term development of Ekornes.
China Qumei’s core business is growing steadily, and channel expansion is expected to break through incremental space. The company actively promotes store brand image upgrading and channel expansion, and the reform has achieved remarkable results: 1) in terms of retail business, with the transformation of “three new marketing” sales model, the upgrading of “Fashion home” brand and the smooth development of store image upgrading with “forced line, scene experience and smart retail system innovation” as the core, 2021q2 Qumei Home Furnishings Group Co.Ltd(603818) revenue achieved double-digit growth, of which the operating revenue of direct channels increased rapidly, with a year-on-year growth rate of more than 50% in 2021h1. 2) In terms of B2B engineering business, the revenue in 2021h1 exceeded 50 million yuan. Relying on the company’s rich finished products + customized product line, full category and one-stop sales and service mode, the number of engineering business dealers increased rapidly.
Investment suggestion: Qumei Home Furnishings Group Co.Ltd(603818) domestic and overseas businesses have made concerted efforts, with high performance at the beginning of 2022 and rising fundamentals. At the same time, the company introduced the head war investment strategy to further enable long-term development. We estimate that the operating revenue of Qumei Home Furnishings Group Co.Ltd(603818) 20212023 will be 5.277 billion yuan, 6.342 billion yuan and 7.424 billion yuan, with a year-on-year increase of 23.33%, 20.19% and 17.05%; The net profit attributable to the parent company was 251 million yuan, 487 million yuan and 686 million yuan, with a year-on-year increase of 141.76%, 93.75% and 41.04%. The corresponding PE was 26.8x, 13.8x and 9.8x, giving a Buy-A investment rating.
Risk warning: industry competition intensifies the risk; Risk of rising raw material prices; Risk of continued tension in shipping.
