\u3000\u3 Shengda Resources Co.Ltd(000603) 578 Zhejiang Three Stars New Materials Co.Ltd(603578) )
Key investment points
In the 21st year, the overall revenue was + 43.52%, and the revenue of the main business of glass doors was + 56.95%
In 2021, the company realized an operating revenue of 826 million yuan, a year-on-year increase of + 43.52%; The net profit attributable to the parent company was 98 million yuan, a year-on-year increase of + 18.15%. Among them, Q4 achieved an operating revenue of 218 million yuan, a year-on-year increase of + 44.01%; The net profit attributable to the parent company was 14 million yuan, a year-on-year increase of – 7.04%. Excluding the influence of the newly merged company Qingdao Weisheng, the company’s main business of glass doors achieved an income of 666 million in 21 years, a year-on-year increase of + 56.95%; The net profit attributable to the parent company was 101 million, a year-on-year increase of + 18.16%. Among them, Q4 achieved an operating revenue of 177 million, a year-on-year increase of + 63.53%, and a net profit attributable to the parent company of 16 million, a year-on-year increase of + 3.04%. The revenue of the main business of glass doors increased sharply, exceeding the consensus expectation of the market.
The rapid development of commercial refrigerators and the continuous expansion of market share have driven the company’s revenue to exceed expectations
As a terminal sales link of the commercial cold chain, the rapid development of the cold chain, the transformation of retail formats and downstream beverage manufacturers actively store cabinets to seize the flow, driving the rapid volume of the refrigerator industry. As the core component of the commercial refrigerator (the cost accounts for 25%), the glass door rises in the wind and brings opportunities. The core competitive advantages of the company are prominent: 1) strong R & D ability and technical advantages, and continue to lead the industry under the trend of intelligent and high-end upgrading of beverage cabinets; 2) Integrated production and manufacturing advantages, the ability to quickly respond to customer needs, leading the industry, while significantly controlling costs and reducing fees, and the profitability is stronger than that of competitors; 3) Scale advantage: the company’s listing and convertible bond fund-raising projects are gradually completed, and the output value in 22 years is expected to reach 1.1-1.2 billion, 8-10 times that of industry competitors, so as to solve the capacity bottleneck. At the same time, the scale effect brings high cost advantage. Under the strong competitive advantage, the absolute leading position of the company is more stable, and the market share continues to increase, driving the company’s revenue to exceed expectations.
The rise of raw materials has short-term pressure on the profit side, but it is optimistic about the release of profitability under the improvement of the company’s growth and scale effect
Affected by the rise of raw materials in the third and fourth quarters of 21 years, the cost of the company is under pressure. Superimposed on the new acquisition of Qingdao Weisheng in 21 years, the gross profit margin is low, and the consolidated statements have a great impact on the profit margin. The gross profit margin of the company in 21 years is 18.87% and the net profit margin is 11.55%. However, after excluding the influence of Qingdao Weisheng, the gross profit margin of the company’s main glass door industry was 22.27%, with a year-on-year increase of -7.82pct (among which the change of accounting standards and the impact of freight transfer in cost on the gross profit margin was about – 3PCT); The net interest rate is 15.12%, with a year-on-year increase of -4.90pct (but it should be noted that the company’s 20-year net interest rate is high, which has the impact of entrusted financial management, and the steady-state net interest rate is about 16% – 17%).
We believe that with the return of orders from the company’s old customers in China and the expansion of new customers, the logic of superposition and independent going to sea is opened, and we are still optimistic about the company’s subsequent growth. At the same time, the main raw materials of the cost side company are glass (accounting for 50% +), aluminum (accounting for about 15%) and PVC (accounting for about 15%). We believe that with the improvement of raw material prices in 22 years, the superposition of scale effect, the reduction of costs and the improvement of Qingdao Weisheng’s profitability, the profitability of the company will be gradually released.
Profit forecast and valuation
In the past 21 years, the prices of Q3 and Q4 raw materials rose rapidly, and the company’s profit side was under pressure. However, we are optimistic about the release of subsequent profitability under the improvement of the company’s growth and scale effect. It is estimated that the operating revenue of the company from 2022 to 2024 will be RMB 1.049/12.79/1.590 billion respectively, with the corresponding growth rate of 27.07% / 21.82% / 24.38% respectively; The net profit attributable to the parent company was 147 / 192 / 248 million yuan respectively, with a corresponding growth rate of 49.70% / 29.92% / 29.61% respectively. The corresponding PE is 13X / 10x / 8x respectively.
Risk tips
The expansion of new customers is less than expected, and the price fluctuation risk of raw materials.
