\u3000\u3 Shengda Resources Co.Ltd(000603) 818 Qumei Home Furnishings Group Co.Ltd(603818) )
Event overview
Qumei Home Furnishings Group Co.Ltd(603818) released the main operating data from January to February 2022. From January to February 2022, the company realized an operating revenue of about 825 million yuan, a year-on-year increase of about + 21%; The net profit attributable to the parent company was about 44 million yuan, about + 85% year-on-year. With high performance and excellent start in 2022, the company’s fundamentals continue to maintain a strong upward trend. Analysis and judgment:
High performance and excellent start in 2022.
In the face of the repeated epidemic at home and abroad, the uncertainty of the economic environment and the rise of raw materials, shipping prices and other adverse factors, the company has made solid progress in various work and the overall operation is better. From January to February 2022, the company’s revenue and net profit attributable to the parent company were about + 21% and + 85% year-on-year respectively, and its performance maintained rapid growth. According to the company’s existing disclosed data, since the single quarter of 2020q3, the company’s revenue side has continued to grow year-on-year, while the profit side has turned losses into profits and the net interest rate has continued to repair. Superimposed on the excellent performance from January to February 2022, the company’s basic upward logic has been continuously verified. We believe that the continuous upward performance is mainly due to: 1) the effective reform of the company, the accelerated development of overseas Ekornes and the high growth of orders; 2) China Qumei continues to optimize its franchise business, continuously promote the development of direct business and innovative business, and further contribute to the increment; 3) We will continue to optimize financial costs, effectively reduce the scale of interest bearing liabilities and replace high-cost liabilities with low-cost liabilities through private placement, the introduction of strategic investors and operational net cash flow repayment. Taking multiple measures at the same time, the company’s business performance continues to maintain a beautiful and basically strong upward trend.
Overseas Ekornes & Chinese Qumei is getting better and growing.
Overseas Ekornes continues to operate upward and has a strong driving force for growth. The company has continued to expand its core brand stressless business category, IMG brand Ka channel and Ekornes Chinese market, and its orders have increased rapidly. Previously, Gaoling investment and Yinti consulting were planned to be introduced as strategic investors, which is expected to empower Ekornes for a long time, and its growth can be expected in the future. China Qumei’s traditional franchise business continued to launch new products and new store image, and its revenue stopped falling and rebounded in 2021; The direct business can effectively improve the operating capacity and accelerate the development of direct business; Continue to develop innovative business and increase performance contribution. In addition, the company continues to optimize the financial cost, and the performance is expected to continue to accelerate the release.
Investment suggestions:
Qumei is undergoing positive changes and its performance is gradually released. Previously, it planned to introduce Hillhouse investment and Yinti consulting as strategic investors, which is expected to accelerate the development of overseas Ekornes in the Chinese market and other cooperation, and help the rapid development of the company. Maintain the company’s revenue side profit forecast. It is estimated that the company’s operating revenue from 2021 to 2023 will be 5.303/63.78/7.463 billion yuan and EPS will be 0.44/0.85/1.20 yuan respectively. According to the closing price of 11.54 yuan / share on March 25, 2022, the corresponding PE will be 26 times, 14 times and 10 times respectively. Considering the accelerated release of the company’s performance, the “buy” rating will be maintained.
Risk tips
Risk of continuous rise in raw material prices; Risk of continued maritime tension; The risk of real estate sales falling short of expectations; The risk of intensified industry competition; The introduction of war investment has not been completed.
