\u3000\u30003 Eternal Asia Supply Chain Management Ltd(002183) 00218)
Event overview
In 2021, the company’s revenue / net profit attributable to the parent company / net profit deducted from non attributable to the parent company were RMB 2.046/1.32/121 billion respectively, with a year-on-year increase of 32% / 161% / 239%, which was in line with expectations. The growth rate of net profit attributable to the parent company was lower than that deducted from non attributable to the parent company, mainly due to the decrease of government subsidies, investment income and non operating income. 21q4 company’s revenue / net profit attributable to the parent company / net profit deducted from non attributable to the parent company were RMB 558/0.33/0.27 million respectively, with a year-on-year increase of 12% / 0% / 11%, which improved month on month. The cash dividend per share was 0.21 yuan, with a dividend rate of 33.8%.
The company launched the third phase of employee stock ownership plan. The total number of employees participating in the plan is no more than 500. The maximum amount of funds to be raised is 47.55 million yuan (of which no more than 11 million yuan is self raised by employees and no more than 36.55 million yuan is loans provided by controlling shareholders). The average purchase price is 10.54 yuan. If the year-on-year increase of non net profit deduction in 2022 is no less than 25%, the equity ownership proportion is 100%; If the growth rate is less than 25%, the equity ownership proportion is 80%. The duration of the ESOP is no more than 36 months, and the lock-in period of the underlying shares is 12 months.
Analysis and judgment:
Price increase is greater than volume increase, and Q4 continues to raise prices. According to the announcement, the sales volume and unit price of the company’s main leather products were 66 million meters and 29.47 yuan / meter respectively, with a year-on-year increase of 12.3% and 15%: (1) the volume increase was mainly due to the expansion of production and the improvement of capacity utilization. In 21 years, the company put into operation a dry process production line, and the capacity increased from 83 million meters to 85 million meters. We calculate that the capacity utilization rate in 2021 was 78%, with a year-on-year increase of 6.6pct. (2) The price rise mainly comes from the optimization of product structure, the increase in the proportion of high value-added products and the contribution of raw material price rise. We estimate that the unit price of 21q4 is 34.66 yuan, an increase of 28% year-on-year and 20% month on month.
Q4 gross profit margin improved month on month. In 2021, the net profit margin of the company was 6.45%, with a year-on-year increase of 3.2pct, mainly due to the increase of gross profit margin. In 2021, the company’s gross profit margin was 22.87%, with a year-on-year increase of 3.57 PCT, mainly due to the improvement of product structure. In terms of expense rate, the sales / management / R & D / financial expense rate was 3.39% / 4.03% / 6.24% / 1.24% respectively, with a year-on-year increase of 0.1 / – 0.2 / 0.8 / – 0.8pct. The increase in R & D expense rate was mainly due to the company’s increase in the development of new materials, new technologies and new products such as water-based, solvent-free, bio based, silicon-based, recyclable and degradable. The net interest rate of 21q4 was 6.13%, with a year-on-year decrease of 0.76pct and a month on month increase of 0.4pct. The year-on-year decrease was mainly due to the sharp increase in the rate of sales and R & D expenses from 3 / 4pct to 3.6% / 7.8%; The gross profit margin of 21q4 was 22.15%, increased by 6.78pct year-on-year, 1PCT month on month, and the gross profit margin improved month on month.
Provision for impairment of inventories and accounts receivable shall be made. The operating cash flow was 137 million yuan, a year-on-year decrease of 8%, and the operating cash flow / net profit attributable to the parent company was 104%, a year-on-year decrease of 193pct, mainly due to the increase of accounts receivable. In 2021, the inventory was 472 million yuan, a year-on-year increase of 38%, the impairment was 12.29 million yuan, and the inventory falling price loss / inventory was 2.6%; Accounts receivable amounted to 214 million yuan, with a year-on-year increase of 31%. The turnover days of accounts receivable were 33 days, with a year-on-year decrease of 3 days. The company accrued 8.54 million yuan of bad debt loss and 4% of bad debt loss / accounts receivable; Accounts payable was RMB 374 million, with a year-on-year increase of 26%, and the turnover days of accounts payable were 76 days, with a year-on-year decrease of 6 days.
Investment advice
We believe that (1) in the short term, the company was still affected by the shipment caused by the epidemic in March. In addition, raw materials continued to rise and the company’s gross profit margin was under pressure; (2) The company’s two production lines in Vietnam are expected to be put into operation in the first half of this year. In addition, according to the announcement, the company plans to add three dry process production lines (including one development experimental line); (3) Due to the lack of core in apple and the impact of the overseas epidemic on the supply chain of Nike and Chivas, it has been lower than expected in 21 years, and the customers of new energy vehicles are still in the foundation stage, which is expected to become an important growth engine in the second half of 22 years; (4) The reward for land acquisition and storage is expected to contribute 170 million yuan, which is expected to be confirmed in the first half of this year.
Maintain the revenue of 2.544/3.138 billion yuan in 2022 / 2023, increase the 24-year revenue of 3.833 billion yuan, maintain the net profit attributable to the parent company of 184 / 246 million yuan in 22 / 23, increase the 24-year net profit attributable to the parent company of 320 million yuan, maintain the EPS of 0.85/1.13 yuan in 22 / 23 and increase the EPS of 1.47 yuan in 24 years. The closing price of 13.2 yuan on March 28, 2022 corresponds to PE of 16 / 12 / 9x. We are still optimistic about the improvement of customer structure and profitability brought by water-based solvent-free products in the medium and long term, Maintain the “buy” rating. At present, JINDA enterprise and Hong Kong Minfeng have reduced their holdings to 6.82% and 5.53%; In September of 21 and January of 22, the company conducted two repurchases, with 325 and 1.26 million shares repurchased respectively. The average repurchase prices were 15.39 yuan and 15.88 yuan respectively. At present, the repurchase has been completed.
Risk tips
The uncertainty of epidemic development; Customer expansion is less than expected; Capacity expansion is less than expected; Reduction risk of financial investment shareholders; Systemic risk.
